• Baird reaffirms Outperform rating and $522 price target on Tesla (TSLA) after Q2 deliveries beat expectations.
  • Vehicle deliveries rose 25% year over year, while energy deployments surged 41%, signaling broad-based growth.
  • The upbeat note comes ahead of Tesla's full Q2 earnings report later this month.

A Solid Quarter

Tesla’s second-quarter delivery numbers have given Baird reason to stay bullish. The broker reiterated its Outperform rating and $522 price target on the electric-vehicle maker, citing stronger-than-expected results. Vehicle deliveries climbed about 25% from a year earlier, while energy deployments jumped 41%, marking a return to annual growth in that segment.

“These results support our positive outlook,” a Baird analyst said in a note, pointing to sustained demand momentum across Tesla’s core businesses. The company is set to report full second-quarter earnings later this month, and the delivery figures have set a constructive tone.

Energy on the Rise

The 41% surge in energy deployments is particularly notable, as it reverses a slowdown seen in prior quarters. Tesla’s energy storage products, including Megapack and Powerwall, have benefited from growing demand for grid-scale and residential battery solutions. The rebound bolsters the narrative that Tesla’s energy business is becoming a meaningful growth driver alongside its vehicle lineup.

Investors have been watching Tesla’s energy segment closely, especially as margins in the automotive business face pressure from price cuts and model transitions. The strong deployment figures suggest that unit economics in the energy division may be improving, though Baird’s note did not provide specific margin estimates.

What’s Next

All eyes are now on Tesla’s quarterly earnings report, due later this month. Analysts will be scrutinizing automotive gross margins, operating expenses, and cash flow, as well as any updates on the Cybertruck ramp and plans for a next-generation vehicle platform. Baird’s reiterated price target implies roughly 15% upside from current levels, based on Friday’s closing price.

The broader market environment remains supportive, with global EV demand continuing to grow and policy incentives in key markets like the U.S. and Europe. However, competition is intensifying, and Tesla’s ability to maintain its delivery growth trajectory while protecting margins will be key to justifying the premium valuation.

*Correction: An earlier version of this article misstated the year-over-year growth in vehicle deliveries. The correct figure is 25%.