Tesla (TSLA) Stock Gains Momentum After Bank of America Upgrades to Buy

Quick Overview

• Bank of America upgraded Tesla from Hold to Buy, setting a $460 price target.
• Analysts describe Tesla as “the current leader in consumer autonomy.”
• BofA estimates Tesla’s Optimus humanoid robot division at more than $30 billion and its Energy division at $90 billion.
• Analyst sentiment remains cautious: just 44% rate Tesla as a Buy, trailing the 55% S&P 500 average.
• Shares gained 2% in early Wednesday trading but still trade 13% below year-to-date levels.

Tesla (TSLA) shares climbed during early Wednesday trading after Bank of America resumed coverage with a Buy recommendation and established a $460 price objective, pushing shares approximately 2% higher to $400.27.

Tesla, Inc., TSLA

The positive call follows a challenging period for the electric vehicle maker. Following a strong fourth-quarter earnings report on January 28, Tesla shares had declined 9%, and entered Wednesday’s trading down 13% year-to-date.

Analyst Alex Perry from BofA identified Tesla as “the current leader in consumer autonomy,” highlighting the company’s Full Self-Driving technology as the cornerstone for what analysts anticipate will evolve into a robotaxi operation.

Tesla’s FSD subscription costs $99 monthly and can manage the majority of everyday driving tasks for vehicle owners. Bank of America views this consumer technology as the stepping stone toward a comprehensive autonomous transportation network.

The company rolled out robotaxi service in Austin, Texas last June, with expansion planned for nine additional cities during the first half of 2026.

Wall Street’s consensus price target for Tesla stands at $427. Bank of America’s $460 forecast exceeds this average, indicating a more optimistic outlook compared to broader analyst sentiment.

Despite the recent upgrade, overall analyst opinion on Tesla remains divided. Only 44% of analysts tracking the stock maintain Buy ratings — significantly lower than the approximately 55% Buy-rating average across S&P 500 constituents.

Tesla trades at a P/E multiple of 363, and InvestingPro’s Fair Value model indicates the shares appear overvalued at present prices. Nevertheless, five analysts have recently increased their earnings projections for the next reporting period.

Humanoid Robotics and Energy Divisions Command Substantial Valuations

Bank of America provided a detailed breakdown of Tesla’s business segments. The investment bank assigns a valuation exceeding $30 billion to Tesla’s Optimus humanoid robot division, representing approximately 2% of the company’s $1.47 trillion market capitalization.

Optimus robots are projected to initially serve manufacturing environments, with potential to displace a portion of the roughly 13 million manufacturing positions in the United States, before eventually entering residential markets.

The Energy division, encompassing residential Powerwall battery systems and Megapack installations for utilities and data centers, received a $90 billion valuation from BofA, constituting 6% of Tesla’s overall enterprise value.

Latest Company Developments to Monitor

Not all recent news has favored Tesla. GLJ Research maintained its Sell recommendation, expressing skepticism regarding the commercial feasibility of the Optimus initiative.

Additionally, a federal judge denied Tesla’s motion to reverse a $243 million jury award connected to a fatal 2019 Autopilot accident, determining that evidence strongly validated the jury’s initial conclusion.

On a more positive note, Tesla recorded a 55% year-over-year increase in French vehicle registrations, suggesting some market stabilization in Europe following two consecutive years of declining sales. Norwegian markets also demonstrated growth.

Heading into Wednesday’s session, Tesla shares had gained 44% over the trailing twelve months, despite facing downward pressure throughout the current year.

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