Tesla Maintained at Hold by Truist After Musk Compensation Plan Approval

Tesla, Inc. (NASDAQ:TSLA) is one of the AI Stocks Investors Are Watching. On November 11, Truist Securities analyst William Stein reiterated a Hold rating on the stock with a $406.00 price target following the recent shareholder approval of CEO Elon Musk’s equity compensation package.

According to the firm, this shareholder approval is a positive development for Tesla as it helps eliminate concerns that Musk may step away from Tesla to focus on developing physical products at his other company, xAI.

Nevertheless, the firm still remains cautious on the stock given that Tesla’s physical products are still “a long way off” and remain largely unproven with close to zero revenue. This is particularly true for FSD, robotaxis, and Optimus.

While Tesla’s FSD technology has been “impressive, it isn’t working as expected,” they noted. This implies how Tesla is still far from manufacturing commercially viable AI products.

“Musk’s equity award approval removes overhang, but physical AI products are still a long way off; The set-up is still tricky. Shareholders recently approved Musk’s pay package, removing a big overhang — that Musk could leave TSLA to develop Physical AI products elsewhere (naturally, at xAI). We continue to see the vast majority of TSLA’s future (and even current) value in the development of physical AI tech (FSD, then robotaxis, then Optimus). Yet, all of these projects are quite unproven (close to zero revenue) and our evaluation of the nearest-term project, FSD, shows it is impressive, but not yet working as expected. DCF PT remains $406; Hold.”

Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.

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Disclosure: None.