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Why these pros are bullish on Tesla

Tesla: Time to hit the brakes?

Shares of Tesla fell Thursday after the electric car company announced an "auto steering" feature coming in about three months and software updates aimed at addressing battery concerns. However, pros told CNBC they were bullish on Tesla's prospects and its stock.

"The automotive industry has entered the digital age and Tesla is far and away the leader," said Drew Cupps, chief investment officer of Cupps Capital Management and a Tesla shareholder.

With the auto steering technology, drivers would not have to control the steering wheel, acceleration or braking when the vehicle is on the highway. During Thursday's conference call, Tesla CEO Elon Musk also detailed a separate update that includes a "range assurance" application and a trip planner. It will warn Model S drivers before they drive out of charging range and plan routes with charging stations.

Read More'Range anxiety' is the worst here

Scott Mlyn | CNBC

Cupps acknowledged Tesla faces headwinds thanks to low oil and currency concerns, but said the big picture is all about the software updates that will become an integral part of owning one of automaker's vehicles.

"Every three months this car company is evolving its product," Cupps said in an interview with "Power Lunch."

"That's what makes Telsa different from the rest of the auto industry. Today it has about 2 percent of the equity value of the $1.2 trillion automotive industry. That, I think, is undervalued."

Colin Rusch, an analyst at Northland Capital Markets, has an "outperform" rating on Tesla and a $298 price target.

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He said the software updates are essential to enable mass adoption of the technology. However, the big revenue driver for the company will be its gigafactory, which will produce its batteries, he told "Power Lunch."

"Not only is it taking cost out of their supply chain but they're going to be able to take these batteries and put them into stationary storage applications," Rusch noted.

Time to bet on Tesla?

Meanwhile, Jeff Kilburg, founder of KKM Financial and a CNBC contributor, thinks in the short term Tesla has further to fall. He's expecting the stock will test its 52-week low of $177. That's because the share price is "dislocated" from the Nasdaq 100.

PowerShares QQQ Trust, which tracks the Nasdaq 100, is up almost 5 percent year to date, yet Tesla is down about 12 percent year to date.

That said, Musk is "spot on, he's an innovator" and because of that shares will eventually move higher, Kilburg said, also on "Power Lunch."

"This is a great opportunity for investors to buy this terrific stock a lot lower," he added.

Kilburg sees $180 as an entry point to start buying.

—CNBC's Jacob Pramuk contributed to this story.

Disclosures: Drew Cupps owns Tesla. Telsa is an investment banking client of Northland Capital Markets; Northland Capital Markets makes a market in shares of Tesla. Jeff Kilburg and his firm do not own shares of Tesla.