Over the weekend, electric vehicle (EV) giant Tesla (TSLA) announced the rollout of its robotaxi service in Dallas and Houston. The company’s robotaxi expansion comes as Alphabet’s (GOOGL) Waymo and Amazon’s (AMZN) Zoox are expanding rapidly. Tesla bulls view robotaxi as one of the key growth catalysts and await more details from management when the company announces its Q1 2026 earnings on April 22.
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New trading tool for AMZN bullsFollowing the news of robotaxi expansion, Morgan Stanley analyst Andrew Percoco reiterated a Hold rating on Tesla stock with a price target of $415, noting that with Dallas and Houston now live, the Elon Musk-led company is progressing towards its target of launching robotaxis in seven new cities by mid-2026.
Top Morgan Stanley Analyst Reacts Positively to Tesla’s Robotaxi Expansion
Percoco highlighted that the addition of the two cities marks the first geographic expansion since the launch in Austin and San Francisco in the summer of 2025. The 5-star analyst noted that based on early media and user footage, Tesla’s robotaxis in Dallas and Houston appear to be operating without a human in-car safety monitor, which is a notable shift from the company’s Austin launch strategy. He added that the fleet size still appears fairly small.
The analyst emphasized that the latest rollout of robotaxis is a “material evolution” compared to the Austin rollout, in which Tesla initially relied on human safety monitors for several months before phasing them out. Percoco believes that this represents “tangible progress” at a time when the market was growing increasingly doubtful about the company’s robotaxi expansion timeline.
Following the launch in Dallas and Houston, Tesla’s remaining targeted cities by mid-2026 include Phoenix, Miami, Orlando, Tampa, and Las Vegas, noted Percoco. “We believe a successful robotaxi rollout has the potential to create a powerful flywheel across Tesla’s ecosystem,” said the analyst.
Percoco explained that incremental unsupervised robotaxi miles driven will help improve Tesla’s underlying autonomy model, accelerating Tesla’s progress toward offering unsupervised full self-driving (FSD) tech for personal use. He believes that as the tech gets better, more people may buy FSD, which could improve auto demand and cash flows. Amid high capex and near-term cash burn, Percoco sees advancements in FSD as key to improving Tesla’s auto sales and margins to fund its longer-term AI goals.
Is Tesla a Good Stock to Buy?
Heading into Q1 earnings, Wall Street is divided on Tesla stock. While bulls are confident about the future growth potential of robotaxis, Optimus humanoid robot, and AI projects, other analysts are concerned about weakness in the EV business amid intense competition.
The Hold consensus rating on Tesla stock is based on 13 Buys, 11 Holds, and six Sells. The average TSLA stock price target of $403.13 indicates a modest 3% upside.
