Tesla is pivoting hard into artificial intelligence and robotics — and the market is taking notice.
Late last month the company said it will halt production of its long-running Model S and Model X so it can retool its Fremont factory to build Optimus humanoid robots. The move accompanies a tougher-than-expected sales backdrop: Tesla reported a 3% year-over-year revenue decline and an 11% drop in automotive revenue, marking the company’s first annual sales decline.
Investors are split between enthusiasm and skepticism. Optimists see Tesla’s physical-AI strategy as a multi-year growth engine that could transform the company’s addressable market, and that optimism has helped lift Tesla shares about 24% over the past 12 months. Including CEO Elon Musk’s vested options, the market currently values Tesla at roughly $1.8 trillion, and the stock trades at roughly 206 times estimated 2026 earnings. Wall Street has responded with several upward revisions to price targets as analysts factor robotics into Tesla’s long-term thesis; the average 2026 price forecast sits at $480 — about 15% above today’s levels.
But not everyone is convinced. Wells Fargo remains bullish, citing robotics as a compelling long-term story. By contrast, GLJ Research analyst Gordon Johnson has been dismissive, calling Optimus a “delusion” and assigning only a 15%–20% probability that Tesla will ever generate meaningful revenue from robotics. “Wall Street bulls are assigning near-certainty to it. That’s not investing. That’s speculation,” he said.
As Tesla repurposes its factories and rebrands itself around AI and humanoid robotics, investors — including those in tech and crypto communities who watch AI-driven narratives closely — will be watching execution and revenue mix closely to see whether the bet pays off.
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