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Tesla's $840 target hinges on robotaxis and trucks
A Morgan Stanley analyst raised Tesla's bull-case price target, but the real story is about recurring revenue from autonomous vehicles and Semi trucks.
In brief
A Morgan Stanley analyst raised Tesla's bull-case price target, but the real story is about recurring revenue from autonomous vehicles and Semi trucks. Tesla's long-term value depends on building profitable recurring revenue from robotaxis, Optimus robots, and autonomous Semi trucks, not just selling cars. Originally…
Morgan Stanley raises Tesla bull case
Andrew Percoco lifted his bull-case target from $820 to $840 while keeping an equal-weight rating and $400 base case. Tesla shares trade around $357.
Tesla's real value is in services
Tesla's future depends on high-margin recurring revenue from robotaxis, Optimus robots, and full self-driving software, not just hardware sales. At 200 times 2026 earnings, the stock only makes sense if you believe in these businesses.
Robotaxis could drive recurring revenue
Tesla plans to earn recurring fare revenue from its Cybercab robotaxis and full self-driving software. The robot-as-a-service model for Optimus robots will generate long-term software revenue.
Tesla Semi trucks offer huge upside
Morgan Stanley projects over 80,000 autonomous Semi trucks by 2040, each generating up to $18,000 monthly in full self-driving revenue. That could mean $17 billion in high-margin FSD revenue by 2040.
“more than 80,000 autonomous Semi trucks on the road by 2040, each generating as much as $18,000 a month”
Semi production ramping up fast
Wall Street expects Tesla Semi units to jump from 4,000 in 2027 to 12,000 in 2028. A successful PepsiCo pilot demonstrated the Semi's lower cost per mile versus diesel trucks.
Musk prioritizes passenger car FSD first
Elon Musk said Semi full self-driving development is taking a backseat for six months while Tesla focuses on Model 3, Model Y, and Cybercab FSD. But he expects Semi FSD to work next year ahead of production scale-up.
“it will definitely be working next year and in time for the scale-up to high production of the Tesla Semi”
Regulatory hurdles remain significant
Tesla must overcome regulatory approval for passenger-car full self-driving before tackling Semi trucks. Adoption rates and actual usage patterns remain uncertain, and Morgan Stanley maintains an equal-weight rating.
Semi is a long-term growth play
The Tesla Semi won't drive near-term earnings but could become a significant recurring revenue source if full self-driving develops as planned. Success depends on both regulatory approval and strong adoption.
The one thing
Tesla's long-term value depends on building profitable recurring revenue from robotaxis, Optimus robots, and autonomous Semi trucks, not just selling cars.
