Piper Sandler has reaffirmed its $500 price target for Tesla following an extensive evaluation of the company”s latest Full Self-Driving (FSD) software, version 14, during a recent tour of the Fremont Factory.
Analysts from the firm conducted a detailed 75-minute discussion with Tesla executives, covering key topics such as advancements in autonomy, chip development, and the rollout strategies for the anticipated robotaxi program.
During their visit, the analysts experienced a ride in a Tesla vehicle equipped with the new FSD v14 software. Analyst Alexander Potter described the driving experience as “flawless” and noted that it may surpass the driving capabilities of an average American.
The demonstration showcased significant enhancements in perception and object handling, with the smoothness of the ride being particularly impressive, according to the analysts.
Tesla recently rolled out FSD v14.2 to its Early Access Program members, addressing notable issues from previous versions. Notably, the brake stabbing problems that had been problematic in earlier iterations appear to be largely resolved. Drivers reported a successful experience using v14.2, with one user testing the software for 62 minutes without encountering the brake stabbing issue.
The driver monitoring system has also been adjusted to be less intrusive, with Tesla indicating plans to allow texting while the system is active in the near future.
Elon Musk hinted at the upcoming release of FSD v14.3, which he described as “the last big piece of the puzzle,” although no specific timeline has been provided for this update.
Analysts on Wall Street are divided regarding Tesla“s valuation, with price targets ranging widely from $131 to $600 per share. Wedbush leads the bullish side with a $600 target, while HSBC has a more conservative outlook with a Reduce rating and a $131 target, citing a disconnect between Tesla“s earnings fundamentals and its high market valuation.
TD Cowen maintains a Buy rating with a target of $509, citing strong demonstrations of autonomous driving and rapid software enhancements. Similarly, Stifel has raised its target to $508, based on progress in the robotaxi initiative and FSD development.
During their tour, the Piper Sandler analysts also discussed Tesla“s in-house chip projects and the growth of its battery storage business, along with the Optimus robot program. They emphasized that cost structures and capital expenditure planning will be crucial for future margin recovery.
