Elon Musk’s Tesla (TSLA) has come a long way, but that progress has also created a new dilemma for investors. The company can now either be viewed as an electric vehicle (EV) giant that is currently facing some challenges, or as an artificial intelligence (AI)-driven technology company increasingly focused on robotaxis, autonomy, and robotics. Adding to that debate, Musk has once again made a bold claim about Tesla’s future.
Recently, the CEO said his company could be among the first to develop artificial general intelligence (AGI) and “probably the first to make it in humanoid/atom-shaping form,” underscoring his strong belief in Tesla’s long-term AI ambitions. The claim is particularly striking because AGI is widely seen as one of the ultimate goals of AI. It refers to a hypothetical form of AI capable of understanding, learning, and performing virtually any intellectual task that a human can, potentially matching or even surpassing human intelligence.
Such an advanced humanoid system would likely be a generation or two ahead of what Tesla is currently expected to introduce with Optimus Gen 3, a humanoid robot designed to handle industrial and household tasks using Tesla’s full self-driving–style AI stack. With Musk doubling down on Tesla’s ambitions in AI and robotics, investors are increasingly weighing the company’s current EV challenges against its potentially transformative AI future. Given this backdrop, is now the right time to buy TSLA stock?
About Tesla Stock
Founded in 2003, Austin-based Tesla has evolved from a small EV startup into one of the most closely followed companies in global markets. The firm built its reputation by challenging the traditional auto industry with its lineup of EVs, battery innovations, and clean-energy solutions. Yet Tesla’s narrative today extends far beyond electric cars.
The company has been channeling significant resources into AI, autonomous driving systems, robotics, and robotaxi networks. In doing so, Tesla appears to be moving away from the image of a conventional automaker and instead aiming to establish itself as a leader in physical AI, robotics, and large-scale energy infrastructure. This strategic shift is also changing the way investors and analysts talk about the company.
Even though many Wall Street analysts still tend to judge Tesla through the traditional lens of an automaker, closely watching quarterly vehicle production and delivery numbers, the focus around the company is gradually shifting. More attention is now turning toward Tesla’s next phase of growth, including the potential mass production of the Cybercab, the future deployment of the Optimus humanoid robot, and a rapidly expanding energy storage business.
However, even with this evolving growth narrative, Tesla is not immune to challenges. The company recently reported a decline in annual sales for the first time, competition in the EV market continues to intensify, particularly from Chinese automakers, and growth in the EV segment is slow. And, recent registration data also highlights the mixed performance of Tesla across Europe.
Last week, Electrek compiled vehicle registration data from 15 territories in the region, including France, the UK, Germany, Portugal, and others. In total, Tesla recorded 17,425 registrations in February, marking a 10% year-over-year (YOY) increase. The report further noted that Tesla posted strong registration numbers in Portugal, Spain, Germany, and France. But not all markets showed the same momentum, as the UK, the Netherlands, Denmark, and Sweden reported declines in sales.
At the same time, competition is accelerating. Tesla’s Chinese rival BYD Co. Ltd (BYDDF) reported a massive 165% surge in European registrations in January, underscoring how aggressively the automaker has been expanding its presence in the region. Despite these pressures, Tesla remains one of the most valuable companies in the market, currently carrying a market capitalization of about $1.49 trillion.
So far in 2026, TSLA shares have fallen 13.23%, lagging the broader S&P 500 Index ($SPX), which has slipped only 1.75% during the same period. Nevertheless, the longer-term picture still appears far more impressive. Over the past year, Tesla stock has climbed 48.56%, comfortably outperforming the broader market’s 16.55% gain over the same timeframe.
Tesla’s Q4 Earnings Snapshot
Tesla's fourth-quarter results for fiscal 2025, released in late January 2026, highlighted a company undergoing a transition. While the core automotive business showed signs of slowing, Tesla’s energy and emerging AI-related segments continued to gain momentum. During the quarter, total revenue came in at $24.90 billion, reflecting a 3% YOY decline, while adjusted earnings per share fell 17% to $0.50.
Also, the period marked the third consecutive quarter of declining revenue, and notably, full-year 2025 revenue declined for the first time in Tesla’s history. Even so, the results still surpassed Wall Street expectations, which had anticipated $24.78 billion in revenue and $0.45 per share in earnings. Much of the weakness came from the automotive side of the business. Tesla’s core segment has faced slowing demand as competition intensifies across global EV markets.
As a result, automotive revenue dropped 11% to $17.7 billion, while total vehicle deliveries fell 16% to 418,227 units during the quarter. In contrast, several other parts of Tesla’s business continued to expand at a healthy pace. The company’s energy generation and storage division posted strong growth, climbing 25% YOY to $3.84 billion, compared with $3.06 billion in the same quarter a year earlier. Meanwhile, the services and other segment increased 18% to $3.37 billion, up from $2.85 billion last year.
Further, Tesla delivered a notable improvement in profitability, reporting its highest gross margin in two years at 20.1%, up from 16.3% in the prior-year quarter, suggesting better operational efficiency even as its automotive segment faces pressure. With the EV business encountering headwinds, CEO Elon Musk has increasingly shifted the focus toward Tesla’s next wave of growth.
During the earnings call, CFO Vaibhav Taneja told investors to expect around $20 billion in capital expenditures this year, aimed at building new manufacturing facilities and expanding investments in Optimus as well as AI computing infrastructure. At the same time, Tesla continues to broaden its product roadmap with an emphasis on scaling production, improving cost efficiency, and unlocking future monetization opportunities tied to AI software.
According to the company, Cybercab, Tesla Semi, and Megapack 3 are all expected to begin volume production in 2026, while initial production lines for the Optimus humanoid robot are currently being installed, laying the groundwork for its eventual mass manufacturing rollout.
How Are Analysts Viewing Tesla Stock?
Even as Musk continues to make bold claims about AGI, Wall Street’s stance on Tesla remains cautious. Overall, the stock carries a consensus “Hold” rating, reflecting a divided outlook among analysts. Out of 43 analysts covering the company, 15 rate the stock a “Strong Buy,” while two suggest “Moderate Buy.” At the same time, 17 analysts prefer to stay on the sidelines with a “Hold” rating, and nine remain firmly bearish, assigning a “Strong Sell.”
The average price target of $408.36 implies a relatively modest upside of 4.9% from current levels. However, the most optimistic forecast on the Street stands at $600, suggesting the stock could potentially climb as much as 54.1% if Tesla’s long-term growth story unfolds as bulls expect.
On the date of publication, Anushka Mukherji 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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