Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.

Gene Munster, the Managing Partner of Deepwater Asset Management, predicts a major rebound for Tesla Inc. (NASDAQ:TSLA) in 2026, despite expecting a dip in the company’s earnings per share (EPS) and revenue estimates for the year.

What Happened: Munster suggests that Tesla’s 2025 performance is largely irrelevant to investors. He believes that the year is setting the stage for a significant recovery in 2026 and beyond. Munster anticipates a 10% decline in deliveries, which make up about 75% of Tesla’s business, in 2025. However, he predicts a 35% growth in deliveries in 2026, supported by an improving EV outlook, a healing brand, and the launch of a new model, according to a report by Deepwater Management.

Don’t Miss: Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – with $1,000 you can invest at just $0.26/share!

In a post on X on Friday, Gene Munster stated, “Elon's message last quarter was that it's all about 2026, and I'd expect he doubles down on that.”

$TSLA earnings are next Tuesday. Elon's message last quarter was that it's all about 2026, and I'd expect he doubles down on that. https://t.co/clGibeJSjP

— Gene Munster (@munster_gene) April 18, 2025

Although revenue is expected to be soft and automotive gross margins may decline in 2025, Munster remains optimistic about Tesla’s long-term investment potential. He emphasizes Tesla’s potential to lead in physical-world AI, autonomy, and robotics as crucial drivers of its future success.

While the projected non-GAAP EPS for 2026 is still below the Street’s estimate, Munster emphasizes that Tesla’s earnings are more than sufficient to finance its transition to real-world AI and autonomy. He also highlights that Tesla concluded 2024 with $37 billion in cash, cash equivalents, and investments, offering further confidence in the company's financial stability.

“Elon will reaffirm his confidence that this transition is unfolding faster than most expect, and that Tesla's product lineup is well-positioned to lead throughout the coming decade,” stated the Deepwater Managing Partner.

See Also: Maximize saving for your retirement and cut down taxes: Schedule your free call with a financial advisor to start your financial journey – no cost, no obligation.

Why It Matters: Tesla’s recent struggles include a sales slump and scaled-back Cybertruck production. This has led some analysts like Dan Ives of Wedbush to suggest that Elon Musk should refocus on Tesla. Reports suggest that Musk's attention to DOGE has frustrated some investors, who feel it diverts his focus from Tesla. Meanwhile, recent talks indicate that his involvement with the government may soon end, possibly freeing him up to concentrate more on Tesla

However, despite a Q1 miss, analysts like Alexander Potter from Piper Sandler believe in Tesla’s future growth potential, especially from robotaxis and new products. Munster’s predictions align with this optimistic outlook, suggesting that the current struggles are temporary and that a major rebound is on the horizon.

Tesla holds a momentum rating of 92.50% and a growth rating of 67.70%, according to Benzinga's Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock’s historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance. For an in-depth report on more stocks and insights into growth opportunities, sign up for Benzinga Edge.

Year-to-date, Tesla stock has lost more than 36%. On Thursday, it edged 0.07% lower on $241.37, as per BenzingaPro.

Read Next:

• The secret weapon in billionaire investor portfolios that you almost certainly don't own yet. See which asset class has outpaced the S&P 500 (1995-2024) – and with near-zero correlation.
• Arrived Home's Private Credit Fund’s has historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate with just a $100 minimum.

Image via Shutterstock

This article 2025 'Largely Doesn't Matter' For Tesla, Says Gene Munster: Elon Musk Company Poised 'For A Major Rebound In 2026 And Beyond' originally appeared on Benzinga.com