AI sets odds of Tesla stock hitting $500 after Q3 earnings

Core Viewpoint - Tesla is preparing to report its quarterly earnings on October 22, 2025, after a challenging year characterized by declining sales, despite a recent surge in stock price following strong delivery numbers [1][9]. Financial Performance - Consensus estimates predict earnings per share (EPS) of $0.53 and revenue of $26 billion for Q3, indicating a significant rebound after a lackluster first half [3]. - Tesla's net income is projected to be around $1.9 billion, with gross margins expected to recover to approximately 18% [7]. Stock Price Predictions - The stock is estimated to have a near-term post-earnings range of $425 to $480, with a 35% chance of reaching $500 [4][5]. - In a more optimistic scenario, if Tesla provides stronger-than-expected guidance, the medium-term price range could be between $460 and $510 [4]. Market Dynamics - Investor sentiment has improved due to CEO Elon Musk's reduced political involvement, allowing a focus on operational execution [9]. - However, challenges remain, including the expiration of the $7,500 US federal EV tax credit, increased competition from low-cost manufacturers like BYD and NIO, and rising input costs [9][10].