Key Points
Despite posting its first year of declining revenue in 2025, Tesla stock is beating the market over the past year.
Analyst price targets are all over the map, with one bearish take seeing 70% in downside from current levels.
A lot is riding on the rollout of robotics and robotaxis, but betting against Elon Musk has proven to be historically dangerous.
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A lot can happen in a year to any stock, but that seems to be the factory default setting when it comes to Tesla (NASDAQ: TSLA). Before sizing up how high -- or low -- shares of the country's leading maker of electric cars can go in the coming year, let's look back at the past year.
Go back a year -- to mid-February of last year -- and all of these things were true:
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- Through almost two decades of operation, Tesla had never posted an annual decline in revenue. The business would deliver a 3% dip on the top line for 2025.
- The Model S and Model X were a small but important part of the business. Both high-end models are now being discontinued, paving the way for production of humanoid robotics.
- Elon Musk was one of President Donald Trump's top advisors, heading a newly created department for cost-cutting. Musk left the administration in May. Two months later, a Trump bill would end the $7,500 tax credit for most domestic electric vehicle purchases by the end of the third quarter.
- Full Self-Driving (FSD) could be purchased for a one-time payment. Tesla's autonomous driving feature became available only as a monthly subscription to new members as of this past weekend.
- The Cybertruck was still turning heads, but by the end of 2025, the next-gen pick-up -- along with the soon-to-be-discontinued Model S and Model X lines -- accounted for just 3% of the vehicles delivered in the year.
Image source: Getty Images.
2026, take the wheel
Now for the plot twist. Despite seeing its automotive revenue plummet by 10% in 2025 along with a 60% plunge for reported income, Tesla's stock is actually trading 16% higher over the past year. Yes, Tesla stock is beating the market over the past year.
Can Tesla keep the upticks going this year? Analysts are understandably all over the map. Price targets are as low as $125 and as high as $600, implying 70% of downside on the bearish end and 46% of upside on the bullish front. The mean price target is $421.73, a mere 3% increase. It would be shocking if Tesla simply marched in place in the coming year.
Lost in the slump in car sales, Tesla's revenue declined only 3% in 2025 despite the double-digit slide on the automotive side, thanks to strength elsewhere. Energy generation and storage revenue rose 25% last year. Services and other revenue climbed 18%.
New offerings are in the works. The Cybercab will kick off production in April. Ending the Model S and Model Y production at its Fremont facility next quarter will transition to the production of the Optimus autonomous humanoid robots.
Despite the end of tax credits and deteriorating sentiment toward electric vehicles, analysts expect Tesla's revenue to grow by 9% in 2026. It will find Tesla cracking the $100 billion in annual sales ceiling for the first time. Profitability will grow even faster. Widening margins at a time of major product rollouts?
Tesla has always been overvalued as a carmaker, but it's a different story if the year ahead is about robotics, FSD breakthroughs, and other high-margin opportunities. The stock will be volatile, but, as in the past year, Tesla is always full of surprises.
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Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
