Tesla (NASDAQ:TSLA) shares are edging about 2% lower today, extending Friday’s 5.5% slide as investors continue to digest the implications of last week’s delivery miss and what it could mean for demand, pricing, and margins in the quarters ahead.
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Forget margin or options. Here's how the pros trade TSLATesla’s energy storage business is adding to the cautious tone after deployments came in well below expectations and marked the first year-over-year decline since 2022. Volumes reached just 8.8 GWh compared to expectations of about 14.4 GWh, a sizable gap that stands out given how consistently this segment had been growing in recent years.
However, Morgan Stanley analyst Andrew Percoco pushes back on the idea that Tesla’s weaker energy storage performance signals a lasting slowdown. As he explains, it is “far too early to call this quarter’s results a trend,” suggesting that the miss should not be overinterpreted. In other words, Percoco views the softness as timing-related rather than structural, arguing that underlying demand remains intact. The analyst points to improving economics in utility-scale storage and growing demand from data center customers as key supports, even as his near-term deployment forecast has been adjusted lower to reflect potential project delays.
Looking beyond that segment, Percoco makes it clear that the more meaningful driver for Tesla’s stock this year lies in autonomy. The analyst argues that “TSLA’s ability to scale the unsupervised robotaxi fleet is the most important catalyst for the stock this year,” highlighting how each additional mile driven contributes to improving full self-driving capabilities. That progress, in turn, could support higher adoption rates, help revive vehicle demand, and enhance cash generation over time.
“To that end, we expect the stock to trade in close correlation to progress in the scaling of the unsupervised robotaxi fleet in Austin and the seven incremental city launches expected by the end of June, particularly in light of potential upside to capex in 2026 and 2027 as Tesla invests in solar and chip manufacturing (not in the >$20bn capex guide this year),” Percoco added.
To this end, Percoco assigns Tesla shares an Equal-weight (i.e., Neutral) rating and a $415 price target, suggesting about 17% upside from current levels. (To watch Percoco’s track record, click here)
Overall, Tesla currently carries a Hold consensus rating based on 32 analyst reviews, split between 13 Buys, 11 Holds, and 8 Sells. The average 12-month price target stands at $393.97, suggesting about 12% upside from current levels, though the wide range between the high estimate of $600 and the low of $25.28 highlights just how divided opinions remain when it comes to Tesla’s outlook. (See TSLA stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.