Stifel has reiterated its Buy rating on Tesla, setting a price target of $508. The firm highlighted strong profit margins and potential demand support from rising gasoline prices as key factors behind its positive outlook.
According to analyst Stephen Gengaro, Tesla delivered stronger-than-expected financial results in the fourth quarter of 2025. The company reported gross profit of $5.01 billion, significantly above forecasts of $4.04 billion. Gross margins reached 20.1%, marking a two-year high, despite facing more than $500 million in tariffs and reduced fixed cost absorption.
Gengaro also emphasized Tesla’s continued progress in key growth areas such as Full Self-Driving (FSD) technology and its Robotaxi platform. These developments are seen as critical drivers of long-term value creation for the company.
Tesla currently has around 1.1 million paying Full Self-Driving users worldwide. While future customer growth is expected to shift toward subscription-based models, this transition may temporarily pressure margins. However, it is likely to generate higher-margin recurring revenue over time.
Stifel also pointed to broader macroeconomic factors that could support electric vehicle demand. In particular, persistently high gasoline prices—especially in the context of the Iran conflict—could encourage more consumers to switch to electric vehicles, benefiting Tesla and the wider EV market.
Tesla’s Robotaxi service is already operating in the San Francisco Bay Area and Austin, with plans to expand into several major U.S. cities, including Dallas, Houston, Phoenix, Miami, Orlando, Tampa, and Las Vegas during the first half of 2026.
The company is also planning significant capital investments, with spending expected to exceed $20 billion in 2026. These funds will support the development of six major facilities, including a lithium refinery, LFP battery factory, Cybercab production, Tesla Semi manufacturing, a new Mega factory, and the Optimus robotics factory.
In addition, Tesla aims to expand its AI computing infrastructure and grow its Robotaxi fleet and Optimus robot production. Reflecting this strong outlook, Stifel has raised its EBITDA forecasts for Tesla to $16.7 billion in 2026 and $21.9 billion in 2027, maintaining a bullish stance on both Tesla and the broader electric vehicle sector.
