George Gianarikas, an analyst from Canaccord Genuity, appeared on CNBC’s ‘Money Movers’ to discuss his outlook on Tesla (TSLA) for 2025 and beyond, expressing a bullish stance on the company’s stock. Despite initial considerations of downgrading Tesla due to its stock price surge, which seemed fueled by political vibes rather than tangible fundamentals, Gianarikas and his team decided to retain their ‘buy’ rating, even increasing the price target based on anticipated earnings growth through 2027.
Gianarikas emphasized that Tesla’s stock performance last year mirrored its revenue growth, bottoming out when year-over-year revenue growth hit its low in Q1. He projects this growth to accelerate into 2025 and further, driven by the introduction of new products promised by Elon Musk. These new products are expected to excite consumers and investors alike, contributing to Tesla’s growth narrative.
A crucial aspect of his bullish outlook is Tesla’s Full Self-Driving (FSD) technology. The recent versions of FSD have generated significant online excitement, potentially leading to more vehicle upgrades and thus, a margin tailwind. This is not just about the potential revenue from upgrades but also about justifying the massive investments Tesla is making in AI and infrastructure. Gianarikas highlighted that if Tesla can validate these investments, it would have broader implications not only for Tesla but for the entire AI and tech sector, which relies on substantial energy and infrastructure investments.
Regarding the specifics of his valuation, Gianarikas detailed a price target of $404, based on a multiple of 40 times the anticipated 2027 earnings of $10.11 per share. This forecast significantly exceeds the current consensus, which sits around $5 per share for the same year. He justified this high multiple by comparing Tesla to the mega-cap tech stocks, which trade at much lower multiples despite growing at less than half Tesla’s rate. He expects Tesla’s gross margins to improve due to scale, FSD adoption, and new product success.
Gianarikas also addressed the complexity of his fundamental rationale, acknowledging that his model assumes everything goes right for Tesla. However, he sees Tesla as more than just an automotive company. He pointed to the potential for increased EV penetration, the introduction of the Cyber Cab, and Tesla’s ventures into robotics and energy storage as additional growth vectors that could extend well beyond 2027. These factors collectively underpin his optimistic view, suggesting Tesla has multiple avenues to maintain its growth trajectory and justify its high valuation in the coming years.
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