Tesla Stock Falls Despite Wild 2026 Prediction From Bull

Coming into Friday trading, Tesla stock was up 20% year to date. (Photo by Justin Sullivan/Getty Images)

Key Points

• Tesla stock was down, while the S&P 500 and Dow Jones Industrial Average were both higher.
• Truist analyst William Stein raised his price target for Tesla to $444 from $406, maintaining a Hold rating on the stock.
• Deutsche Bank analyst Edison Yu expects Tesla to sell 405,000 vehicles in the fourth quarter, down from 496,000 a year ago. Wall Street projects about 440,000 sales.

A downbeat call on the outlook for car sales appears to be raining on the parade for Tesla stock.

The shares began the day up on Friday, continuing a recovery from a dip driven by worry over the outlook for stocks linked to artificial intelligence. Behind the gains were a price-target increase and a bold prediction from one of Wall Street’s most upbeat analysts.

Fundamental factors regarding the car business may have turned the tide.

Tesla stock traded as high as $490.49 before giving up gains and falling 0.5% to close at $481.20 on Friday. The S&P 500 and Dow Jones Industrial Average rose 0.9% and 0.4%, respectively.

Truist analyst William Stein took his target price to $444 from $406, but kept a Hold rating on the stock.

Not a lot changed in terms of his views. Truist adjusted its views on prices of semiconductor and AI stocks heading into the new year. Still, a higher price target on Wall Street can help a stock.

The bigger factor might have been Dan Ives, who rates Tesla shares at Buy and has the highest price target on Wall Street at $600 per share.

Ives published 10 predictions for tech stocks in 2026. One has to do with Tesla. It “will successfully launch Robotaxis in over 30 cities in 2026 and start to scale volume production of Cybercabs, starting the true autonomous era for Musk & Co,” he wrote.

That is a lot of cities. And it would be great for shares. But it looks like a stretch goal. Alphabet’s Waymo, which completes about 450,000 self-driving taxi rides a week, operates in five.

Tesla launched a robo-taxi service in Austin, Texas, in June, with a safety monitor in the front passenger seat. CEO Elon Musk recently tweeted that the company is now testing cars without safety monitors. That helped Tesla stock hit a record intraday high of $495.28 on Wednesday, before closing down 4.3%, at $469. Shares were caught up in a broad selloff across companies linked to AI.

Investors have been focused on AI-trained robo-taxis, believing they will usher in a new era of earnings growth for the company. Robo-taxis are a big reason why, heading into Friday trading, Tesla stock was up 20% year to date, despite falling car sales.

Car sales still matter, though. Deutsche Bank analyst Edison Yu wrote Friday that he expects Tesla to sell 405,000 vehicles in the fourth quarter, down from 496,000 a year ago. Wall Street projects about 440,000 sales, according to FactSet.

Despite his downbeat call, Yu is a Tesla bull, rating shares Buy with a $500 price target for the stock.

That sales are weakening isn’t a big surprise. The elimination of the $7,500 federal electric-vehicle purchase tax credit in September has led to a couple of lean sales months in the U.S.

On Wall Street, 41% of analysts covering the company rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Tesla stock is about $420 a share.

Write to Al Root at allen.root@dowjones.com