Mizuho has lifted its 12-month price target on Tesla (NASDAQ:TSLA) to $540 from $530 and kept an Outperform rating following the company's reporting of fourth-quarter results. The revised target implies roughly 25% upside from a prevailing share price of $431.46, though InvestingPro data cited in the company note indicates the stock is trading above its Fair Value.
In the fourth quarter Tesla posted revenue of $25 billion and reported earnings per share of $0.50. Those figures were essentially in line with consensus expectations of $25.1 billion in revenue and $0.45 EPS. The company also reported an automotive gross margin excluding regulatory credits of 17.9%, an increase of 250 basis points sequentially. Management attributed that margin lift to a favorable mix and pricing dynamics.
InvestingPro metrics referenced by analysts highlight that Tesla has experienced pressure on gross profit margins over the trailing twelve months, with a gross profit margin of 17.01% for that period. The quarter-over-quarter improvement in automotive margin excluding credits stands out against that backdrop.
Beyond vehicle results, Tesla is reallocating investment toward AI, software and robotaxi projects as it anticipates more muted electric vehicle demand growth in 2026 - roughly 5% year-over-year based on expectations noted in the company commentary. Tesla has committed $2 billion to its xAI initiative and disclosed plans to double GPU capacity in the first half of 2026. The company's balance sheet position was described as having more cash than debt and a current ratio of 2.07 per InvestingPro data shared alongside the earnings update.
On product timelines, Tesla reiterated plans to launch its cybercab in the first half of 2026. The company said revenues tied to Full Self-Driving version 14 increased quarter-over-quarter. The timeline for Optimus v3 was adjusted slightly, with management now targeting the end of 2026 rather than the previous first-quarter 2026 goal.
Tesla provided fiscal 2026 capital expenditure guidance of $20 billion, a marked increase from approximately $9 billion in fiscal 2025. The guidance reflects factory expansion across six facilities and preparations for anticipated AI5 production in 2027.
Other sell-side responses to the fourth-quarter results varied. RBC Capital reiterated an Outperform rating with a $500 price target and emphasized the company's plan to raise capital spending from roughly $9 billion in 2025 to more than $20 billion in 2026. Baird also kept an Outperform stance and called out the elevated capital expenditure outlook. By contrast, Truist Securities trimmed its target slightly to $438 from $439 and maintained a Hold rating after noting modest upside in revenue and gross profit margin. Jefferies likewise sustained a Hold rating and a $300 price target, describing the earnings call as notable.
Mizuho's increase in its price target comes as at least 10 analysts have recently raised their earnings estimates for the ensuing period. The analyst reactions and reiterated capital plans underscore how market watchers are parsing Tesla's transition toward AI and software initiatives while monitoring vehicle demand and margin trends.
Summary: Mizuho raised its Tesla price target to $540 and kept an Outperform rating following Q4 results that showed modest beats on revenue and EPS and a sequential improvement in automotive gross margin excluding credits. Tesla plans to scale AI investments, double GPU capacity in early 2026, and substantially increase capital expenditures for fiscal 2026 as it pursues robotaxi, cybercab and Optimus development.