Tesla is approaching its 'most hyped' event in a decade. Here's what Wall Street is expecting from Robotaxi Day.

• Tesla is about to unveil its Robotaxi, the self-driving car Elon Musk has talked about for years.
• The event could be the "most hyped" day for the company in a decade, one analyst said.

Elon Musk is headed into what might be the most important day for his electric car company in years.

Tesla will host its long-awaited Robotaxi event on Thursday, where the company is set to unveil the self-driving car Musk has teased for years.

Some Wall Street analysts say it could be a pivotal moment for Tesla. The company's stock is down 40% from its all-time high in 2021, and investors are looking for fresh catalysts amid concerns about demand and rising competition in the EV market.

Tesla shares have rallied 12% over the last month, a sign traders are anticipating the new unveiling of the model, according to Jay Woods, the chief global strategist at Freedom Capital Markets. But investors will have to wait and see if that surge lasts, or if the upside quickly dissipates as Tesla discloses more about its self-driving car model, he said in an interview with Schwab Network this week.

"This is the most hyped event that Musk has had in almost a decade. They've been talking about autonomous driving, the Robotaxi, for about 10 years," Woods said. "Now, we finally get to see what's underneath the hood."

Questions are lingering over how and when the autonomous vehicle, rumored to be called the Cybercab, will be deployed. Tesla shares slumped earlier this year after Musk delayed the Robotaxi event from August to October, fueling concerns about the new technology.

Here's what Wall Street is expecting from the big event on Thursday.

UBS

Tesla has a big opportunity to convince investors that it's stock isn't overvalued, but the self-driving car may not be able to live up to expectations, UBS strategists said in a note.

"We wouldn't be surprised to see relative strength in the stock leading into the event. But can TSLA live up to expectations and sustain momentum post the event? We are less convinced on this front," analysts at the bank said, adding they believed it could take years for the Robotaxi to actually hit the streets.

Tesla is also hosting the Robotaxi event at Warner Bros. Discovery's movie studio, Bloomberg reported. That venue may be able to demo the self-driving car with a Hollywood polish, analysts have said.

"But there is some irony in hosting it at a Hollywood studio. Waymo runs actual Robotaxi service in "real world" LA (and SF and more)," UBS wrote.

UBS has a "sell" rating on the stock and a price target of $197 a share, implying 19% downside from current levels.

Truist Securities

Truist Securities said in a note that Tesla is likely to target its Robotaxi release date in late 2026 and try to distinguish the new car model as smaller and lower-cost than its other cars.

The company is also expected to unveil Optimus 2, or give investors a "sneak-peak" at a third model of the humanoid Robot. In sum, the event could be more about AI than coming car models, Truist added.

"We recognize the potential for this event to be a positive catalyst if TSLA were to reveal the car it intends to introduce in 2025 that includes a smaller form factor and a less expensive drivetrain; however, we see this as relatively unlikely."

The firm reiterated its "hold" rating on the stock and its price target of $236 a share, implying 3% downside from current levels.

Wedbush Securities

The Robotaxi unveiling could be a true turning point for Tesla, according to Wedbush.

"We believe Robotaxi Day will be seminal and historical day for Musk and Tesla and marks a new chapter of growth around autonomous, FSD, and AI future at Tesla. We continue to believe Tesla is the most undervalued AI name in the market," strategists said in a note, adding that they expect Tesla to release info on the vehicle's scale, cost per mile, as well as a potential ride share app.

AI and full self-driving developments could yield as much as $1 trillion in value for Tesla alone, the firm added, though it acknowledged the "number of hurdles and questions" investors had about the car.

"With very few industry events as widely anticipated as this, we believe Musk will address the near-term pain points seen by investors and the company's long-term vision as Tesla goes through its second transformation not seen since the Model 3/Y production overhaul. We firmly believe that Tesla remains a Robotics/AI play in the future rather than just an EV vendor," the note added.

Wedbush reiterated its "outperform" rating on the stock and its price target of $300 a share, implying 23% upside from current levels.

CFRA Research

Investors may be expecting too much from the Robotaxi, according to Garrett Nelson, a senior equity analyst at CFRA Research. The car probably won't be sold for several years and has "numerous technological hurdles" as well as safety and regulatory obstacles, he added.

"In our view, investor expectations are sky high, raising the likelihood of a disappointment and a "sell the news" reaction in its aftermath," Nelson wrote in a note this week.

He added that the company likely "remains far" from a high-functioning self-driving vehicle.

"In our opinion, there is an increasing disconnect between the stock's lofty valuation and the reality that TSLA's earnings growth has hit a wall – and intermediate-term growth drivers are unclear," Nelson said.

CFRA reiterated its "hold" rating on the stock and $240 price target, implying 1% downside from current levels.