Investing.com -- Stifel has maintained its Buy rating on Tesla with a $508 price target, citing robust margins and potential demand tailwinds from elevated gasoline prices.

Analyst Stephen Gengaro said in a note that Tesla’s 4Q25 gross profit of $5.01 billion “easily exceeded our $4.04 billion forecast” and that margins of 20.1% “reached a two-year-high” despite over $500 million in tariffs and lower fixed cost absorption.

Gengaro highlighted that Tesla is making “strong progress on FSD and Robotaxi, both of which we believe is critical to value creation.”

The analyst noted that the company now has nearly 1.1 million paid Full Self-Driving customers globally, though future net additions will shift to subscriptions, a “short-term margin headwind but leads to high-margin, recurring revenue.”

Stifel also pointed to macro factors supporting electric vehicle demand, writing that “if the Iran War persists, high gasoline prices will be a tailwind for EV sales.”

Tesla’s Robotaxi service is currently operating in the San Francisco Bay Area and Austin, with expansion planned to Dallas, Houston, Phoenix, Miami, Orlando, Tampa, and Las Vegas in the first half of 2026.

Capital expenditures are projected at over $20 billion in 2026, funding six factories, including its lithium refinery, LFP factory, Cybercab, Semi, new Mega factory, and Optimus factory.

Gengaro said the spending will also expand Tesla’s AI compute infrastructure and fleet of Robotaxi and Optimus units.

Stifel increased its 2026-27 EBITDA forecasts to $16.7 billion and $21.9 billion, respectively, maintaining a bullish outlook for both Tesla and the broader EV market.