Elon Musk’s AI & Robotaxi Revolution Fails to Spark Tesla Stock Rally - Analysts Remain Skeptical

Elon Musk's grand AI and robotaxi vision hits a wall as Tesla shares refuse to budge.

The Reality Check

Despite Musk's characteristic hype around Tesla's autonomous driving ambitions and robotaxi network plans, Wall Street responds with a collective shrug. The stock flatlines while analysts maintain cautious positions.

Market Skepticism Deepens

Investors appear unmoved by futuristic promises, focusing instead on current fundamentals and execution risks. The disconnect between technological ambition and market performance grows wider by the day.

When flashy presentations meet cold, hard trading floors - another reminder that Silicon Valley dreams don't always translate to Wall Street gains. Maybe focus on delivering cars profitably before promising fleets of self-driving taxis?

Elevate Your Investing Strategy:

• Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.

Musk Highlights Tesla’s Push into AI and Autonomy

On the earnings call, Musk focused on Tesla’s long-term push into AI and self-driving technology rather than near-term profits. “I think that Tesla has the highest intelligence density of any AI out there in the car,” he said, adding that the company is “scaling quite massively” with its Robotaxi ambitions and feels “confident in expanding future production.”

He also discussed Tesla’s new in-house AI chip, saying the “AI5 chip … will be 40× better than AI4.” However, Musk clarified that Tesla is “not about to replace Nvidia (NVDA), to be clear,” noting that the company continues to rely on Nvidia hardware for AI training and data center operations.

Investors and Analysts Cautious on Robotaxi Optimism

Despite Musk’s upbeat tone, investors were not fully convinced. Many expected clearer details on the Robotaxi rollout and regulatory progress, but Musk gave few updates, saying only that expansion could come “by the end of the year.” This left markets uneasy about how close Tesla really is to large-scale autonomy.

Analysts echoed that caution. Morningstar analyst Seth Goldstein said the market “got a little too carried away with enthusiasm for the robotaxi,” adding that a full rollout is “still a few years away.” He said hopes for a 2025 launch may be too early, given the testing and regulatory hurdles still in place.

Also, Jefferies analyst Philippe Houchois maintained a Holdrating and $300 price target after the results, calling the earnings call “more repetition than news.” He added that Tesla’s auto business “no longer drives valuation,” though it continues to generate enough free cash FLOW to support future AI and Robotaxi projects.

Is TSLA Stock a Buy? 

Turning to Wall Street, TSLA stock has a Hold consensus rating based on 15 Buys, 13 Holds, and 10 Sells assigned in the last three months. At $366.61, the average Tesla price target implies a 16.48% downside risk. The stock has gained 75.07% over the past six months.

It must be noted that analysts may update their price targets for TSLA stock after this earnings report.