Tesla Stock Could Soar 550% to $5 Trillion After Notching Its Worst Day Since 2020, According to a Wall Street Expert

Core Viewpoint - Tesla's stock has experienced a significant decline, dropping 15% in a single trading session and 51% from its December peak, resulting in over $700 billion in lost market value [1][2]. Company Performance - Tesla reported disappointing financial results for 2024, with a 2$27.5 billion, the first decline in annual deliveries in its history, and a 200 basis point drop in operating margin [4]. - The company has missed Wall Street's consensus earnings estimate in five of the last six quarters, indicating ongoing challenges [4]. Market Dynamics - Consumer demand for Tesla vehicles has weakened, leading to a loss of market share in the U.S., Europe, and China [5]. - Despite these challenges, Tesla remains the leader in electric-car sales and is the only company capable of producing profitable electric vehicles [6]. Future Opportunities - Tesla is planning to launch an autonomous ride-sharing service (robotaxis) in Austin, with a projected addressable market of $10 trillion by 2030, potentially increasing gross margins significantly [7]. - Estimates suggest that Tesla could have 900,000 robotaxis on the road by 2035, contributing$17 billion in profits, with projections of growth to 7.5 million robotaxis by 2040, adding $120 billion to net income [8]. Analyst Perspectives - Hedge fund manager Ron Baron believes each robotaxi could generate between$30,000 and $50,000 in annual profits, leading to substantial net income contributions from a fleet of robotaxis [9]. - Analysts expect Tesla's adjusted earnings to grow at 24% annually through 2026, with some estimates suggesting a 35% annual growth rate through 2030, which could make current valuations appear more reasonable in hindsight [12][13].