President Donald Trump’s administration’s aggressive push into robotics has thrust Tesla (TSLA) back into the investment spotlight. Tesla stock climbed modestly on news that Commerce Secretary Howard Lutnick is championing the robotics industry and considering an executive order to accelerate development. However, the real question is whether government support can bridge the gap between CEO Elon Musk’s lofty promises and commercial reality.
The timing of this robotics initiative is interesting for Tesla. The EV maker finds itself in an awkward position, with its core business struggling amid competition and aging models. Meanwhile, Musk continues to insist that the company’s future value lies almost entirely in products that don’t exist yet.
A few months back, Musk claimed Optimus humanoid robots would eventually account for 80% of Tesla’s value, a remarkable statement for a product still in pilot production with no clear path to market.
Cathie Wood Is Bullish on Tesla and Optimus
The disconnect between vision and execution has become Tesla’s defining characteristic. On recent earnings calls, Musk has bypassed uncomfortable questions about vehicle demand and profitability instead to paint elaborate pictures of robot armies and autonomous fleets.
Over the years, Musk has promised robotaxis would serve half of America by the end of 2024, a prediction that proved wildly optimistic. Tesla has yet to sell vehicles capable of operating safely without human supervision, even as Waymo logs millions of fully autonomous rides and Chinese competitors race ahead.
Ark Invest CEO Cathie Wood also identifies humanoid robots as potentially the most significant opportunity in artificial intelligence. During an appearance at Saudi Arabia’s Future Investment Initiative, Wood called humanoid robots the ultimate embodied AI opportunity, surpassing even transportation and medical uses. Tesla is among the top holdings in the ARK Innovation ETF (ARKK), given Wood’s bullish stance on Optimus.
Other robotics stocks posted stronger gains on the administration news, with Serve Robotics (SERV) initially jumping 8% and Richtech Robotics (RR) surging 11%. That suggests investors see broader opportunity in the sector rather than viewing Tesla as the primary beneficiary.
Is Tesla Stock a Good Buy Right Now?
Tesla’s third-quarter earnings call revealed a company betting its future almost entirely on technologies that remain largely theoretical, even as its core automotive business faces mounting challenges. CEO Elon Musk spent most of the session discussing robotaxis, humanoid robots, and artificial intelligence chips rather than addressing questions about vehicle demand following the expiration of federal tax credits.
The company posted record quarterly deliveries and revenue of $28.1 billion, up 12% from a year earlier. But operating income dropped 40% to $1.6 billion as costs climbed across AI research, restructuring, and stock-based compensation. While Tesla launched more affordable Model 3 and Model Y Standard versions starting under $40,000, management provided no color on how these price cuts might impact already-squeezed margins.
Musk’s presentation focused heavily on what he called an inflection point for Tesla as it brings AI into the real world. He claimed the company has clarity on achieving unsupervised self-driving and plans to expand vehicle production as quickly as possible, potentially hitting 3 million units annually within two years. The Cybercab robotaxi, optimized for autonomy without a steering wheel or pedals, begins production in the second quarter of next year.
The robotaxi service currently operates in Austin and the San Francisco Bay Area with safety drivers on board. Musk said Austin would remove safety drivers by year’s end, with expansion to eight to 10 cities planned for 2025.
The energy storage business provided a bright spot with record deployments and gross profit exceeding $1 billion. Tesla unveiled Megablock, a simplified industrial storage system, and expanded its residential solar lease program. Free cash flow hit a record $4 billion for the quarter, pushing total cash and investments to $41.6 billion.
What Is the TSLA Stock Price Target?
Analysts tracking Tesla stock forecast revenue to fall by 2.8% year over year to $94.94 billion in 2025, while adjusted earnings are expected to narrow by 32% to $1.65 per share.
However, Wall Street projects the EV maker to end 2029 with revenue of $212 billion and earnings per share of $8.34. If TSLA stock is priced at 50x forward earnings, it will trade around $417, which is below the current trading price.
Out of the 41 analysts covering TSLA stock, 14 recommend “Strong Buy,” two recommend “Moderate Buy,” 16 recommend “Hold,” and nine recommend “Strong Sell.” The average Tesla stock price target is $386, indicating downside potential of almost 10% from current levels.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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