02:34 PM EDT, 07/22/2024 (MT Newswires) -- Tesla (TSLA) is expected to slightly exceed expectations in its Q2 earnings, with gross margins a major focus of investors, Wedbush said in a note Monday.

"We believe the Tesla demand story has made a shift for the positive after a rough last 6-9 months with stronger than expected 2Q deliveries earlier this month marking a major "turning point" in the Tesla bull case story looking ahead into 2H24/2025," Wedbush analysts, including Daniel Ives, said in the note.

They said auto gross margins in the 16.5% to 17% range would be the sweet spot and should mark the beginning of an upward climb into the next few quarters.

A major focus of the conference call will be the overall demand environment, China growth in a competitive/price cut backdrop, and the outlook for the rest of the year, the report said.

"We believe Tesla's march towards 2 million units' annual trajectory should be reached over the coming quarters with clear momentum and easier comps for 2025," the analysts said.

Wedbush maintained its outperform rating on the stock with a $300 price target.

Tesla shares rose more than 5% in recent trading.

Price: 251.58, Change: +12.38, Percent Change: +5.18