MW Tesla's stock should be bought now. This analyst explains who should buy it and why.

By James Rogers

Tesla shares have lost more than half their value in a span of just three months, and Cantor Fitzgerald now believes there's 80% upside

Shares of Tesla Inc. were bouncing back on Wednesday, after Cantor Fitzgerald said it has fallen enough that investors can start buying, if they can stomach some volatility over the short term.

Analyst Andres Sheppard said he sees a number of upcoming events that could provide a boost to the electric-vehicle stock, such as the rollout of so-called full self-driving in China and Europe over the coming months; the launch of a robotaxi service in June; and the introduction of a lower-priced, mass-market EV by the summer.

He raised the firm's rating on the stock $(TSLA)$ to overweight, after it had idled at neutral for eight months. Sheppard kept the price target on the stock at $425, which implies about 84% upside from current levels.

With his upgrade, now exactly half of the 58 analysts surveyed by FactSet who cover the stock are bullish, while 26% are neutral and 24% are bearish.

The stock was up 2.6% in morning trading after slumping 9.9% over the past two days.

Shares have plunged 52% from their record close of $479.86 on Dec. 17, weighed down by worries about soft demand trends, intensifying competition and concerns over how Chief Executive Elon Musk's controversial role in the Trump administration is denting consumer demand.

Sheppard said he believes the recent selloff has provided "an attractive entry point" for investors.

But he qualified that, saying that he was speaking of buyers who have a more than 12-month investment horizon and are "comfortable with volatility."

For the short term, he believes Tesla's automobile sales could be hurt by tariffs and the likely cancellation of the federal tax credit for purchasers of EVs, among other potential drags on demand.

"We also expect a mild [first quarter], driven by lower demand in Europe and increased competition in China, plus some negative sentiment from Elon's polarizing politics," Sheppard wrote in a note to clients.

But, for those who can handle some short-term pain, there is some good news on the horizon that could get the stock rallying again.

Sheppard pointed to the planned introduction of robotaxis in Austin, Texas, in June and in California later in the year; the rollout of full self-driving, or FSD, systems in China in the first quarter; and the rollout of FSD in Europe, which Cantor expects in the first half of 2025.

Read: Will Tesla's projected sales growth survive 'Trump 2.0'? Here's what to know.

He also highlighted the introduction of a lower-priced vehicle in the first half of 2025; high-volume production of Tesla's Optimus Bot humanoid robot and initial deliveries to customers in 2026; and the introduction of the Semi truck, with production starting in the second half of 2025 or in 2026, as catalysts.

Related: Tesla sales have 'significantly underperformed' in all key regions, analyst says.

And Musk's deep involvement with President Donald Trump, which has recently weighed on results, could eventually become a significant positive for Tesla's outlook.

Sheppard was also upbeat following a tour of Tesla's Gigafactory and AI Data Centers in Austin.

"Overall, we are bullish after our factory visit, and after the recent market selloff and share underperformance," Sheppard wrote.

The stock has fallen 42.8% to date in 2025, making it the worst performer in the S&P 500 index SPX this year. The S&P 500 has slipped 3.9% this year.

"Additionally, recall that President Trump's administration previously discussed plans to potentially establish a federal framework for self-driving vehicles in the U.S.," Sheppard added. "If implemented, then we see Tesla as a major beneficiary."

Sheppard's firm, Cantor Fitzgerald, was led for decades by Howard Lutnick, a Trump financial backer who now serves as U.S. commerce secretary.

-James Rogers

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March 19, 2025 11:05 ET (15:05 GMT)

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