Tesla shares rose 0.3% overnight as the company prepares for a significant production surge at its German factory. According to Bloomberg, the Tesla Gigafactory Berlin-Brandenburg plant is targeting output of up to 7,500 vehicles per week, or approximately 375,000 vehicles annually. The factory, which supplies more than 30 markets, is expected to create about 3,500 jobs as part of Tesla's broader production expansion. This ramp-up comes after fresh hiring and a recovery in European registrations after two years of declining sales, with stronger demand feeding directly into factory utilization.
Tesla reports second-quarter results after market close on Wednesday, with expectations of stronger top- and bottom-line results. According to Morningstar, analysts expect revenue of $26.36 billion, up 18% from $22.39 a quarter ago. Adjusted earnings per share (EPS) is projected to rise 31% to $0.54, while earnings before interest, taxes, depreciation and amortization (EBITDA) is expected to increase 8% to $3.97 billion. Morningstar raised its fair value estimate for Tesla to $450 from $425, implying an 18% upside from Friday's current levels, with the firm rating the stock '3-star' and expecting Tesla deliveries to rise about 10% in 2026 to nearly 1.8 million vehicles, up from 1.64 million last year. The higher forecast should drive higher automotive gross profit margins, with margins, excluding regulatory credits, expected to be in the high teens.
According to CNBC reports, Dan Ives of Yorkville Ives & Co. believes 2027 could be Tesla's golden year driven by artificial intelligence initiatives. Ives projects that Tesla's robotaxis, driverless ride-hailing vehicles, will reach more cities in early to mid-2027, while the company's humanoid robot Optimus is expected to launch in the second half of 2027. These developments would mark Tesla's transition from an electric vehicle manufacturer to an AI company, as reported by CNBC. Investors will look for updates on the Cybercab, robotaxi expansion, Full Self-Driving version (FSD) 15 and Optimus, which Morningstar called a large long-term growth driver.
On Stocktwits, retail sentiment for TSLA has been 'bullish' over the past week amid a 31% rise in 24-hour message volumes. In contrast to optimistic outlooks, Wells Fargo analyst Colin Langan maintains an Underweight rating on Tesla with a $130 target price, representing approximately 67% downside from the roughly $396 share price at the time of the report. According to CNBC, Langan expects price cuts and rising input costs, including copper and lithium, to reduce profit margins from higher volumes. Ives counters that the AI trade is only in its third inning, with chip demand running 13-to-1 against supply.
Morningstar said Tesla is in 'excellent financial health', with $44.7 billion in cash, equivalents and investments as of March 31. However, the firm's 'Very High' uncertainty rating is due to intense EV competition, potential price cuts, and heavy spending on AI, autonomous driving, and humanoid robots. As reported by CNBC, Ives indicated that demand is stabilizing, supported by a rebound in Europe after several years of declines. The analyst's assessment comes ahead of Tesla's earnings report scheduled for October 21, which will provide the next indication of car margins and the company's progress toward its AI transformation goals.
