06:43 AM EDT, 10/20/2025 (MT Newswires) -- Tesla (TSLA) could top Wall Street's estimates for its third-quarter earnings amid the electric vehicle maker's artificial intelligence transformation led by autonomous driving and robotics initiatives, according to Wedbush Securities.

The company's per-share earnings are expected to come in at $0.53 for the third quarter, the brokerage said in a Sunday client note. Wedbush believes the figure is "beatable" with a stronger tailwind from Tesla's energy division, which has a higher margin profile compared with its electric vehicle business. Analysts polled by FactSet are looking for adjusted EPS of $0.55.

Tesla's third-quarter revenue is pegged at about $26 billion by the Street, with automotive revenue of roughly $19 billion, "which we believe is achievable given the strength across EV deliveries and energy generation," Wedbush analysts, including Daniel Ives, wrote in the note. The consensus on FactSet is for revenue of $26.33 billion. Gross margin, excluding credits, is projected to show further improvements in the third quarter, according to the brokerage.

The EV maker is scheduled to release its latest quarterly results on Wednesday. The stock was up 1.2% in Monday's most recent premarket activity.

Tesla is finally starting to see stable demand trends after a "brutal few quarters," and Wedbush expects generally positive commentary from senior management on demand heading into the end of the year. However, the ending of the US tax credits for electric vehicles and sluggish demand in Europe could be a headwind, the brokerage said.

Earlier this month, Tesla posted its third-quarter deliveries that rose both annually and sequentially, beating Wall Street's estimates.

Wedbush expects investors to focus on the company's Robotaxi rollout across the US and volume production trajectory for the Cybercab service in 2026 during its earnings call on Wednesday. The brokerage estimates the autonomous valuation to be worth $1 trillion for Tesla over the next few years.

"The Tesla story going forward is around the AI transformation being led by the autonomous and robotics initiatives," according to Ives. "We continue to strongly believe the most important chapter in Tesla's growth story is now beginning with the AI era now here."

Tesla's model Y vehicle has generated incremental demand in China, while the new Model YL has played a significant role in spurring new demand for its fleet in the region, Wedbush said. Tesla's strong footprint in China is also a good sign for the company, despite recent tensions between the Asian country and the US on trade, according to the brokerage.

"We continue to believe Tesla could reach a $2 trillion market cap early 2026 in a bull case scenario and $3 trillion by the end of 2026 as full scale volume production begins of the autonomous and robotics roadmap," Ives said.

Wedbush maintained its outperform rating on Tesla's stock and its 12-month price target of $600.