Tesla (TSLA) may be facing some near-term issues, but RBC Capital Markets analyst Tom Narayan is keeping his eyes on what lies ahead. In a note to investors dated July 28, Narayan reaffirmed his Outperform (Buy) rating on the stock and raised his price target to $325 from $319.
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The four-star analyst acknowledged the short-term pressure in Tesla’s core businesses. In the Q2 earnings call, Tesla faced a “$300M tariff headwind,” mostly tied to its auto segment. There were also delays in launching the lower-cost Model Y due to the expiration of U.S. tax credits. Still, Narayan sees these as temporary issues and believes the company’s long-term upside lies in its future bets: robotaxis, Full Self-Driving (FSD), and humanoid robots.
Why Tesla’s Future May Be Bigger Than Cars
Narayan sees Tesla’s robotaxi project as a major long-term growth driver. The company’s first service, launched in Austin, has already expanded rapidly without major safety issues. Tests are now running in places like California, Florida, and Nevada, and Tesla hopes to cover half the U.S. population by the end of the year. Narayan believes Tesla could outpace rivals thanks to its simpler, more affordable tech and a custom-designed robotaxi, known as the Cybercab. If the rollout succeeds, he estimates the robotaxi business alone could generate nearly $190 billion in annual revenue by 2040.
Alongside robotaxis, FSD is also gaining traction. Following a major update, the company has seen a “25% increase in adoption rates.” Tesla aims to launch the software in Europe, starting with the Netherlands, and plans to roll out an “unsupervised” version for personal use later this year.
As for robotics, Tesla plans to show a new humanoid prototype by year-end and start production in 2026. According to Narayan, the robots will likely be used in Tesla’s own factories at first, but the company aims to scale output to 1 million units a year within five years.
Is TSLA Stock a Buy or Sell?
Given the ongoing challenges, Wall Street has a Hold consensus rating on Tesla stock based on 14 Buys, 15 Holds, and eight Sell recommendations. The average TSLA stock price target of $310.65 indicates a downside risk of 4.59% from current levels.
