11:34 AM EST, 12/16/2024 (MT Newswires) -- Tesla's (TSLA) autonomous and artificial intelligence initiatives could become a "game changer" for both the company and Elon Musk under a Trump White House, Wedbush said in a note.

The firm said in a Sunday note that it estimates the AI and autonomous vehicle opportunity could be worth at least $1 trillion for Tesla. Regulatory hurdles around full self-driving and autonomous technologies are expected to ease, potentially fast-tracking key initiatives.

Wedbush predicts Tesla could reach a $2 trillion market cap by the end of 2025, driven by progress in its autonomous vision and robust delivery demand, particularly in the Chinese market, according to the note.

The estimate does not account for potential contributions from Optimus, Tesla's AI robot, which could become a significant catalyst in the future.

Key developments, such as Tesla's FSD adoption and the launch of the Cybercab, are expected to play a pivotal role in achieving this valuation. Wedbush anticipates that regulatory support under Trump could accelerate Tesla's 2026/2027 goals to align with its autonomous timeline in China.

However, Wedbush warns that potential retaliatory trade policies from Beijing could create geopolitical risks for Tesla in the crucial Chinese market. Despite this, the firm expects carve-outs on tariffs for Tesla and predicts Elon Musk will play a significant role in U.S.-China tariff discussions under a Trump administration.

Wedbush raised its price target on Tesla stock to $515 from $400, while maintaining an outperform rating.

Tesla shares rose 4.3% in recent trading.

Price: 454.97, Change: +18.74, Percent Change: +4.30