Elon Musk's plans for Tesla advertising will be a major boost as key pieces of the EV maker are undervalued, Wedbush says

• Tesla's plan to start advertising is a major positive for the EV maker, Wedbush's Dan Ives wrote.
• It will help inform the general public about the company's pricing and offerings.
• Two new products and Musk's stepping down as Twitter CEO will also benefit shareholders.

Tesla's plans to start advertising were met with excitement after the company's Annual Shareholder meeting on Tuesday, with CEO Elon Musk later admitting surprise over the level of enthusiasm expressed by shareholders. 

Investors are right to be excited, according to Wedbush Securities' Dan Ives. 

In a note on Wednesday, Ives said the move is as a major positive for the electric vehicle maker, as it could expand the company's prominence among broader markets.

The note said that "many parts of the Tesla product portfolio are undervalued by the Street with [Full Self-Driving] a major potential value adder on top of the company's expanding product portfolio across auto and energy," adding that advertising could help inform the public about Tesla's offerings.

Prior to Tuesday's announcement, Tesla had not advertised, though Musk would promote the company through his Twitter feed and on other public forums. The decision to finally do away with the no-marketing approach was in response to a shareholder's question, and made in the moment, Musk said in a CNBC interview. 

Though there hasn't been enough time to develop formal plans, he said advertising would emphasize information on Tesla's pricing and safety.

Ives also noted other positives that could cause an upside swing for the carmaker. 

Notably, Musk's recent decision to hire Linda Yaccarino as Twitter's new CEO was "music to the ears of Tesla shareholders." That's after Musk's chaotic take over of the social media platform last fall, leading to frustration among investors over his divided attention and bad press for Tesla. 

New Tesla products were also teased during Tuesday's event, and would be critical to accelerated growth, the note said. Though Musk did not disclose details, he estimated that the new offerings would amount to 5 million units sold annually. Meanwhile, the long-awaited Cybertruck is on track to hit production this year.

The CEO also gave encouraging outlooks on a sell-driving future, while AI implementation within Tesla's products also provided a positive tailwind. Tesla's next-gen unit is set to half the factory footprint and require no rare-earth metals, the note said.

"Overall, while Musk cited a choppy macro for the next year, we heard an optimistic Musk with Tesla set to have a strong year of innovation and demand in the year ahead," Ives wrote.

Tesla's stock rose 4.5% Wednesday to $174.05 a share. Wedbush has maintained its outperform rating and has a $215 price target.