Tesla Q3 Earnings Preview: Wedbush’s Daniel Ives Sees Turning Point As AI, Robotics Era Kicks In

Wedbush Securities reiterated its 'Outperform' rating on Tesla, Inc. with a $600 price target, ahead of the company’s third-quarter (Q3) results due Wednesday after the bell. 

Analyst Daniel Ives expects earnings to mark a turning point as Tesla transitions into what he calls the “AI transformation” era, led by its autonomous driving and robotics programs.

Wedbush sees Tesla’s Robotaxi rollout and Optimus production roadmap as key catalysts for long-term growth, with the firm estimating that the autonomous business alone could be worth $1 trillion to Tesla’s valuation over the next few years.

Tesla’s stock rose 0.9% in overnight trading on Sunday, according to Yahoo Finance.

Deliveries Beat, Demand Stabilization In Focus

After a series of tough quarters, Ives said Tesla is beginning to show more stable demand trends, helped by pull-forward EV demand ahead of the expiration of U.S. tax credits and a rebound in China sales.

Wall Street expects Q3 revenue near $26 billion, including $19 billion from automotive sales, and earnings per share (EPS) around $0.53, which Wedbush believes could be beatable given higher-margin contributions from the energy division. Gross margins excluding credits are expected to continue improving from last year’s lows.

Model Y refreshes and regional demand recovery should also support near-term results, though Ives cautioned that sluggish European demand remains a headwind.

China As A Renewed Growth Engine

Wedbush highlighted that China, once a headwind, is now a source of strength. The firm pointed to new Model Y variants, including the six-seat Model YL, as drivers of incremental demand in the region. Tesla’s Shanghai Gigafactory remains the backbone of its global output, and the company continues to benefit from local production scale and efficiency.

Despite ongoing tariff disputes and an intensifying price war in the Chinese EV market, Wedbush said Tesla’s positioning remains “relatively good,” calling China the “heart and lungs” of Tesla’s growth story.

Key Watchpoints

Tesla’s Nov. 6 shareholder meeting will be closely watched, with investors expected to vote on Elon Musk’s proposed $1 trillion pay package. Ives said this meeting will also likely lay the groundwork for Tesla’s major investment in xAI, which he views as “a key ingredient” in Tesla’s broader artificial intelligence ambitions.

Long-Term Valuation And Outlook

Wedbush continues to forecast an AI-driven expansion that could propel Tesla’s market capitalization to $2 trillion by early 2026, and as high as $3 trillion by the end of 2026, as autonomous and robotics production reaches scale.

Ives emphasized that while near-term earnings are important, “they take a backseat to the broader and important AI initiatives” now underway.” 

Tesla’s Stocktwits Sentiment Split Ahead Of Earnings

On Stocktwits, retail sentiment for Tesla was ‘bearish’ amid ‘low’ message volume.

Some bullish traders predicted the stock could rally toward the $500 level and even break past prior highs, while others remained skeptical, warning that Tesla often gives up its overnight gains after initial spikes.

Tesla’s stock has risen 9% so far in 2025.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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