Tesla Bets Big On Autonomy And Robots As Analysts Weigh Costs And Upside

Barclays said the pivot to physical AI ‘will be costly’, stating a sharp spike in capital spending expected in 2026.

• Dan Ives reiterates position that Tesla has the potential to reach a $2 trillion market capitalization in early 2026.
• Goldman Sachs said Tesla’s valuation has long hinged on AI-driven profits, which will come under even greater scrutiny as planned capital spending ramps up.
• Barclays maintained an ‘Equal Weight’ rating and a $360 price target.

Tesla shares are in focus after the company announced a $20 billion push into autonomous driving and robotics, following a fourth-quarter earnings report that topped Wall Street expectations.

CEO Elon Musk also announced that Tesla plans to wind down production of its higher-end Model S and Model X vehicles starting next quarter.

Tesla plans to spend more than $20 billion in capital expenditures in 2026, up from $8.5 billion in 2025, as it ramps up production of the Cybercab, Tesla Semi, and Optimus robot, with the Fremont factory shifting to Optimus lines. The company expects to unveil the next-generation Optimus in the first quarter and begin production by year-end.

Tesla also reported Q4 earnings of $0.50 per share and a revenue of $24.9 billion, both beating Wall Street estimates. The company also disclosed a roughly $2 billion investment in xAI to strengthen its ability to deploy AI-driven products and services.

What Are Analysts Saying?

Dan Ives, managing director at Wedbush Securities, reiterated his position that Tesla has the potential to reach a $2 trillion market capitalization in early 2026, with a bull-case path to $3 trillion by the end of the year as its AI strategy gains traction. Wedbush maintained an ‘Outperform’ rating and a $600 price target, around 37% upside from current levels.

Meanwhile, Barclays said the pivot to physical AI ‘will be costly’, according to the Fly. While the firm reiterated an ‘Equal Weight’ rating and a $360 price target, it cautioned that the transition will be costly, highlighting a sharp spike in capital spending expected in 2026.

Goldman Sachs said Tesla’s valuation has long hinged on AI-driven profits, which will come under even greater scrutiny as planned capital spending ramps up but lifted its price target to $405 from $400 while maintaining a ‘Neutral’ rating, citing better-than-expected Q4 results and stronger margins.

Stock Watch

TSLA shares fell 1.3% after the opening bell on Thursday, with retail sentiment turning ‘extremely bearish’ from ‘bullish’ a day earlier.

One user stated that it's hard to call Tesla a great investment.

Another user looked to book profits.

Year-to-date, the stock has declined around 7%.

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