According to "The Big Bank," Bank of America Securities raised Tesla's target price to $471, citing its advantages in autonomous driving and real-world AI applications

Bank of America Securities released a report, raising the target price for Tesla (TSLA.US) from $341 to $471. They believe that Tesla's core automotive business accounts for only about 12% of its total valuation, while Robotaxi accounts for 45%, FSD for 17%, energy generation and storage for about 6%, and Optimus for 19%. This target price increase is mainly due to a reduction in the cost of equity capital, favorable progress in Robotaxi, and an increase in the valuation of Optimus to reflect its potential in entering international markets.

Bank of America Securities indicated that they adjusted their forecasts for Tesla to reflect stronger energy business performance, raising the gross margin forecast for 2026 from 28.5% to 31%, more affordable Model 3/Y models, and the initial contribution of Robotaxi to services and other business segments. They also considered higher operating expenses related to growth plans, estimating $13.2 billion for 2026, an increase of 24% from previous forecasts. The firm continues to view Tesla as the company with the greatest advantage in autonomous driving and physical AI applications in the current market. However, considering the challenges Tesla faces in the short term, they reiterated a "neutral" rating.

In the short term, Bank of America Securities believes that Tesla will continue to face challenges in its North American automotive business, primarily due to the expiration of IRA (Inflation Reduction Act) subsidies. However, they are more optimistic about the energy business, which has performed better than expected so far this year. Management's comments on Robotaxi are also encouraging, as Tesla has expanded its Austin service coverage area three times and expects to launch Robotaxi in 8-10 metropolitan areas by the end of the year. Tesla's pure vision solution has the potential to allow Robotaxi to expand at a pace far exceeding that of its competitors