06:28 AM EDT, 09/15/2025 (MT Newswires) -- Tesla (TSLA) could reach a market capitalization of $2 trillion by the middle of 2026, with the electric vehicle maker positioned well to lead the autonomous driving sector, led by its "wartime" Chief Executive Elon Musk, according to Wedbush Securities.

The brokerage estimates Tesla's artificial intelligence and autonomous opportunity is worth at least $1 trillion for the company, it said in a Sunday client note. Wedbush believes the auto manufacturer has begun progress towards a potential $2 trillion valuation over the next 12 to 18 months, with its full self-driving technology and the acceleration of its planned Cybercab service representing the "golden goose" for Musk and his team.

"We believe Tesla and Musk are heading into a very important chapter of their growth story as the AI revolution takes hold and the Robotaxi opportunity is now a reality on the doorstep," Wedbush analysts, including Daniel Ives, wrote in the note. Tesla's shares rose 1.4% in Monday's most recent premarket activity.

The brokerage believes that investors are beginning to see through the short-term demand issues for the EV maker and realize it's in a pole position to be a "clear leader" in the autonomous market, with Robotaxis expected to expand to 30 to 35 cities in the US over the next year.

"Musk is driving this vision and is now in a 'wartime CEO' mode which is music to the ears of Tesla bulls with this AI arms race happening across the tech world," Ives said.

Earlier in September, Tesla's board of directors proposed a new compensation package potentially worth around $1 trillion for Musk that could boost his voting power in the company to about 25%. Wedbush believes the new pay package represents a "relief" for Tesla's investors and is expected to keep Musk at the helm of the company until at least 2030.

"Musk remains the most important asset to Tesla and the Board made the smart and right move," according to the brokerage.

Wedbush also expects the pace of Tesla's AI and autonomous initiatives to accelerate under US President Donald Trump's administration, which is likely to clear some of the regulatory hurdles the company has previously faced related to autonomous driving. The brokerage anticipates federal regulators to take more control of autonomous driving regulations, reducing state-level authority on the technology.

Despite recent tensions between Musk and Trump, the US leader wants the country to stay ahead of China in the AI race, with autonomous vehicles a key factor and Tesla playing a central role when it comes to Robotaxis, Wedbush added.

Wedbush maintained its outperform rating on Tesla and reiterated its 12-month target of $500.