Bank of America analyst Federico Merendi has increased the price target for Tesla stock to $471 from $341 while maintaining a Neutral rating. The adjustment reflects stronger progress in Tesla's Robotaxi and Optimus programs, which now account for a significant portion of the company's projected value. This comes amid broader Wall Street optimism about Tesla's AI and autonomy initiatives following its Q3 earnings.
In a research note released on October 29, 2025, Bank of America analyst Federico Merendi raised his price target on Tesla (NASDAQ: TSLA) shares by 38% to $471, up from $341, but kept the Neutral rating intact. Merendi's updated valuation uses a sum-of-the-parts (SOTP) model extending through 2040, highlighting Tesla's shift toward AI-driven growth beyond its core automotive business.
The model attributes 45% of Tesla's total value to the Robotaxi platform, 19% to the Optimus humanoid robot, 17% to Full Self-Driving (FSD) software, and 6% to the Energy Generation & Storage segment. In contrast, the core automotive business, which dominates current operations, represents just 12% of the overall value. 'Overall, we find that TSLA’s core automotive business represents around 12% of the total value while robotaxi is 45%, FSD is 17%, Energy Generation & Storage is around 6% and Optimus is 19%,' Merendi noted.
The price target revision is driven by a lower cost of equity capital, accelerated Robotaxi progress, and a higher valuation for Optimus due to potential expansion into international markets. Merendi emphasized that Tesla's advancements in self-driving technology have exceeded earlier expectations, positioning Optimus as a key long-term opportunity. However, he cautioned that much of this potential is already reflected in the stock's current valuation, contributing to the maintained Neutral stance.
This update aligns with post-Q3 earnings adjustments by other firms, though Wall Street's consensus remains a Hold, with an average price target of $383.66 based on 14 Buy, 11 Hold, and 9 Sell ratings. Tesla's Q3 results showed record revenue but missed EPS estimates, with strong deliveries underscoring the company's foundational strength amid evolving focus on autonomy and robotics.
