Tesla (TSLA) Stock: Robotaxi Launch Drives Rally as Analyst Predicts $2,600 Target

TLDR

Table of Contents

Tesla stock rose 0.5% in premarket trading Wednesday to $364.86, following a 7% jump Tuesday
Shares have surged over 50% since April 22 earnings despite falling 2025 earnings estimates from $2.74 to $1.93 per share
Tesla plans to launch AI-trained robotaxi service in Austin, Texas by end of June with approximately 10 vehicles
Cathie Wood maintains $2,600 price target in five years, banking heavily on robotaxi success
Tesla trails competitor Waymo, which already performs over 250,000 weekly paid rides versus Tesla’s upcoming 10-vehicle start

Tesla stock continues climbing as the electric vehicle maker prepares for its robotaxi launch next month. The company’s shares gained momentum despite earnings estimates dropping over the same period.

Trading opened Wednesday with Tesla up 0.5% at $364.86 in premarket activity. This follows Tuesday’s 7% surge that extended the stock’s recent hot streak.

The rally has pushed Tesla shares up more than 50% since the company’s April 22 first-quarter earnings report. This upward movement comes even as 2025 earnings estimates fell to $1.93 per share from $2.74, according to FactSet data.

Technical analyst Will Tamplin from Fairlead Strategies sees room for more gains. “Tesla still has positive short-term momentum and doesn’t have any ‘sell’ signals yet,” he said. “It has room to next resistance near $384.”

AI Optimism Fuels Recent Gains

The stock’s surge centers on excitement around Tesla’s upcoming robotaxi service. CEO Elon Musk recently confirmed the autonomous ride-hailing service will launch by the end of June in Austin, Texas.

The initial rollout will start small with approximately 10 vehicles. Investors are betting this service could unlock new growth opportunities for the automaker.

AI optimism has become a major driver for Tesla shares in recent weeks. The market views self-driving cars as potentially transformative for the company’s business model.

How the robotaxi launch progresses will likely determine Tesla’s stock performance in the second half of 2025. June represents a crucial testing ground for the technology and investor confidence.

Cathie Wood’s Bold Price Prediction

Ark Invest’s Cathie Wood remains bullish on Tesla’s robotaxi potential. She recently reiterated her prediction that Tesla stock will reach $2,600 within five years.

This target represents over seven times the current stock price. Wood’s projection assigns 63% of Tesla’s future revenue to the robotaxi business.

Wood previously made successful Tesla calls in the mid-to-late 2010s. Her early support helped lift her ARK Innovation ETF to prominence on Wall Street.

However, this prediction faces challenges that didn’t exist during her earlier Tesla calls. The company isn’t pioneering this market segment like it did with electric vehicles.

Waymo currently leads the autonomous driving space. The Alphabet subsidiary has offered paid driverless rides since March 2022 and performs over 250,000 weekly trips.

Spotted in SF:
Waymo now testing new vehicle Zeekr 👀 pic.twitter.com/JtsU940NRa
— Steph Smith (@stephsmithio) May 17, 2025

Tesla’s self-driving technology currently operates at level 2 autonomy, requiring human supervision. Waymo has achieved level 4 autonomy, enabling fully driverless operations.

Ashok Elluswamy, Tesla’s head of self-driving, recently admitted Waymo holds a couple years’ advantage in autonomous driving technology. This represents a different competitive landscape than Tesla faced in electric vehicles.

Waymo operates in four major cities after three years of gradual expansion. The measured approach reflects regulatory hurdles and safety considerations in autonomous vehicle deployment.

Tesla will need rapid expansion to catch Waymo and justify Wood’s price target. The company must scale beyond Waymo’s current 250,000 weekly rides to reach profitability levels that support an $8.2 trillion enterprise valuation.

Alphabet doesn’t separate Waymo’s financials but includes it in “Other Bets” segment. This division generated $450 million revenue in Q1 2025 while posting a $1.2 billion operating loss.

The current robotaxi market appears far from profitability, even for the established leader. Tesla faces the challenge of not just catching up but exceeding current market size expectations.

Tesla stock was down about 10% year-to-date coming into Wednesday but up 103% over the past 12 months.

Stay Ahead of the Market with Benzinga Pro!

Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders: