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Last year brought a bumpy ride for Tesla (TSLA) as the electric vehicle (EV) titan grappled with intense competition, aggressive price cuts, layoffs, and top executive exits. Even its much-publicized robotaxi event, expected to showcase the company’s innovation, failed to resonate with investors, leaving sentiment at a low point. Just when the outlook seemed bleak, President Donald Trump’s reelection injected fresh optimism into the market, with investors speculating that a more favorable regulatory environment could give Tesla a much-needed boost.
While the company’s start to 2025 wasn’t exciting, with its Q4 vehicle deliveries falling short of consensus estimates, its latest foray into humanoid robotics could prove to be a major growth catalyst for the company. The rapid rise of artificial intelligence (AI) has propelled humanoid robots from science fiction into an imminent reality. These AI-driven marvels are set to transform industries, from manufacturing to logistics, by addressing global labor shortages.
And the future of humanoid robots is looking brighter than ever. Morgan Stanley forecasts a humanoid robot population of 40,000 by 2030, soaring to 63 million by 2050, while Citigroup takes an even bolder stance, forecasting a massive $7 trillion market with over 1 billion robots in operation by mid-century. Earlier in January, Tesla unveiled plans to produce several thousand of its highly anticipated Optimus humanoid robots in 2025, with production set to ramp up dramatically in the years ahead.
CEO Elon Musk has outlined an ambitious vision, aiming to increase output tenfold in 2026 to produce between 50,000 units and 100,000 units, with even more aggressive expansion planned for the following year. This ambitious ramp-up places Tesla at the heart of a rapidly evolving robotics revolution. So, as the Optimus robot inches closer to large-scale production, should investors buy, sell, or hold TSLA now? Let’s take a closer look to find out.
About Tesla Stock
Tesla (TSLA) has firmly established itself as a trailblazer in the EV market, propelled by the remarkable success of its flagship Model 3. However, Tesla’s ambitions extend far beyond just building cars. The company has diversified into energy storage, automation, and robotics, with each segment undergoing rapid innovation and expansion, positioning Tesla to redefine multiple industries in the years to come. Since its IPO in 2010, the company has rapidly evolved into a powerhouse, presently commanding a market capitalization of almost $1.4 trillion, surpassing the combined value of some of the world’s most prominent legacy automakers.
Despite navigating a series of hurdles, shares of this Elon Musk-led company have rallied an astonishing 96% over the past year, far outperforming the broader S&P 500 Index’s ($SPX) 24.6% returns during the same time frame. Even more remarkable, in just the past three months, Tesla’s shares have skyrocketed by roughly 90%, leaving the broader market’s modest 3% return in the dust.
Given its meteoric rise over the past few months, Tesla certainly comes with a premium price tag, making it a challenging pick for some investors. The stock is trading at an eye-watering 142.53 times forward earnings and 15.33 times sales, well above its sector medians. These elevated multiples highlight the market’s bullish outlook on Tesla’s future growth, signaling that investors are willing to pay a steep price for the potential of continued innovation and dominance in the years ahead.
Tesla Soars After Q3 Earnings
After dropping a mixed Q3 earnings report on Oct. 23, shares of this EV giant skyrocketed almost a stunning 22% in the next trading session. While the company’s revenue of $25.2 billion shot up 8% year over year, it slightly missed Wall Street’s forecast figure of $25.4 billion. On the other hand, Tesla’s adjusted earnings of $0.72 per share soared 9% annually, crushing Street estimates by an impressive 20.5% margin.
Tesla’s latest quarter saw a 2% year-over-year rise in automotive revenues, reaching $20 billion and making up nearly 78.7% of its total revenue. The company’s energy generation and storage segment skyrocketed by a remarkable 52% annually to $2.4 billion. Meanwhile, Tesla’s services and other revenue, which includes income from non-warranty vehicle repairs, surged by an impressive 29% year over year, reaching $2.8 billion.
Moreover, the company said in its earnings release that its Cybertruck gained significant traction, quickly securing its position as the third best-selling EV in the U.S. for Q3, trailing just behind Tesla’s Model Y and Model 3. Its rapid rise in the market highlights not only its appeal to consumers, but also its potential to shake up the EV landscape. Tesla’s earnings also got a significant lift from its Full Self-Driving (FSD) system, which continues to drive growth.
During the Q3 earnings call, CFO Vaibhav Taneja highlighted that FSD contributed $326 million in revenue thanks to its integration into the Cybertruck and the introduction of the “Actually Smart Summon” feature. Looking forward, Tesla is preparing to launch a new lineup of vehicles, including more affordable models, in the first half of 2025, marking a significant step in expanding its market reach.
Tesla Tumbles as Q4 Deliveries and Production Miss Estimates
Tesla shares took a hit earlier this month on Jan. 2, plunging over 6% after the company released its Q4 vehicle delivery and production figures, which fell short of Wall Street’s expectations. Despite delivering 495,570 vehicles during the quarter, a modest increase from the previous year’s 484,507, the numbers came in well below the anticipated 512,250, sparking investor disappointment.
In terms of production, Tesla managed to roll out 459,445 vehicles, significantly under the expected 503,500 and trailing last year’s output of nearly 500,000. The underwhelming results sent shockwaves through the market, prompting a sharp selloff.
What Do Analysts Expect for Tesla Stock?
Overall, Wall Street appears cautious about TSLA stock, maintaining a consensus rating of “Hold.” Of the 38 analysts offering recommendations, 12 advise a “Strong Buy,” two suggest a “Moderate Buy,” 14 give a “Hold,” and the remaining 10 analysts maintain a “Strong Sell.” While TSLA has already soared beyond its average analyst price target of $320.96, the Street-high target of $515 suggests that the stock can still climb as much as 20.8% from current levels.
Tesla’s impressive growth is largely driven by its EV business, which remains its core revenue engine. However, recent delivery misses in Q4 highlight the challenges it faces in this competitive market. While Tesla’s ambitious push into robotics adds an exciting layer to its future potential, the EV sector still holds the key to its success. And with the company’s latest performance miss, investors may want to stay cautious, closely monitoring Tesla’s next steps before jumping back in.
