TLDR
- Tesla stock jumped 3.3% to $430.41 after UBS raised its price target from $307 to $352, though the firm kept its sell rating on the shares.
- The company beat Q4 earnings expectations with $0.50 EPS versus $0.45 consensus and $24.9B revenue, but revenue dropped 3.1% year-over-year.
- Tesla announced a $2 billion investment in Elon Musk’s xAI and plans over $20 billion in capital spending for 2026 focused on robotics and AI infrastructure.
- The automaker will end production of Model S and Model X vehicles to free up factory space for manufacturing Optimus humanoid robots.
- Analyst consensus stands at “Hold” with mixed ratings: 17 buys, 14 holds, and 8 sells, with price targets ranging from $300 to $551.
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Tesla shares climbed 3.3% on Friday, closing at $430.41 after UBS upgraded its price target on the electric vehicle maker. The move came despite UBS maintaining its sell rating on the stock.
Tesla, Inc., TSLA
UBS raised its price target from $307 to $352. Trading volume hit 82.2 million shares, up 29% from the typical daily average of 63.7 million shares.
The stock traded as high as $439.88 during the session. Tesla now carries a market cap of $1.43 trillion with a P/E ratio of 398.53.
Analyst opinions on Tesla remain divided. Seventeen analysts rate the stock a buy, fourteen assign hold ratings, and eight recommend selling. The consensus rating sits at “Hold” with an average price target of $409.58.
Some firms see much higher potential. Canaccord Genuity raised its target to $551, while Stifel Nicolaus set its target at $508.
Tesla reported Q4 earnings on January 28th that topped expectations. The company posted earnings per share of $0.50, beating the $0.45 consensus estimate by five cents.
Revenue came in at $24.9 billion, slightly above the $24.75 billion analysts expected. But revenue fell 3.1% compared to the same quarter last year when the company posted $0.73 EPS.
Physical AI Strategy Takes Center Stage
Wedbush analyst Daniel Ives called Tesla and Nvidia “the two indispensable pillars of the burgeoning physical AI market.” Ives sees Tesla shifting from a vehicle delivery story to a high-margin software and robotics company.
Full Self-Driving software adoption currently stands at 12% but could surge to 50%, according to Ives. He set a $600 base case price target and an $800 bull case target for the stock.
Tesla announced it will stop producing Model S and Model X vehicles. The decision frees up factory space at the Fremont plant to manufacture Optimus humanoid robots.
The company also revealed a $2 billion investment in xAI, Elon Musk’s artificial intelligence venture. The move signals deeper AI integration across Tesla’s product lineup.
Capital Spending and Production Changes
Tesla plans to spend over $20 billion on capital expenditures in 2026. The money will fund robotics development, autonomous vehicle technology, and AI infrastructure.
The massive spending plan raises questions about near-term cash burn and profit margins. Investors will watch free cash flow closely as the company pivots toward robotics and robotaxis.
Speculation about a potential SpaceX merger boosted investor sentiment this week. The rumored deal could create synergies across Musk’s various companies.
Insider trading activity shows mixed signals. Director Kimbal Musk sold 56,820 shares on December 9th at $450.66 per share for a total of $25.6 million.
Director James Murdoch sold 60,000 shares on January 2nd at $445.40 per share, totaling $26.7 million. Insiders own 19.90% of the company’s stock.
Institutional investors hold 66.20% of Tesla shares. Several hedge funds adjusted their positions in the most recent quarter.
The stock’s 50-day moving average sits at $446.91, while the 200-day moving average stands at $406.71. Tesla maintains a current ratio of 2.07 and a debt-to-equity ratio of 0.07.
Ives called 2025 a “huge transition year” for Tesla and predicted 2026 would be a “golden year” driven by autonomous Cybercabs and Optimus robots. Energy and storage growth plus FSD subscription increases helped offset weaker vehicle delivery numbers in Q4.
