Tesla's (TSLA) Growth Outlook Hinges on AI, Not Just EV Sales

Tesla (NASDAQ: TSLA) is one of the AI Stocks to Watch. Tesla (NASDAQ: TSLA)’s physical AI strategy is increasingly being seen as a multi-layered, multi-year growth driver on Wall Street. On February 12, Tigress Financial Partners analyst Ivan Feinseth resumed coverage on Tesla (NASDAQ: TSLA) with a Buy rating and a price target of $550.

Separately, on February 13, Wells Fargo reiterated the stock as “Underweight,” stating that its data checks show delivery numbers remain weak.

Of the 4 major markets we track, Jan TSLA deliveries are trending -18% y/y & -59% m/m. Cont’d weakness in EU, while China domestic deliveries are at lowest since Nov’22, & highest exports since Oct’22.

Despite these near-term demand concerns, Tigress sees long-term growth and value creation being driven by Tesla’s evolution from a pure-play EV manufacturer into physical AI platform. This pivot to a physical AI flywheel is centered on technologies such as FSD, robotaxis, and Humanoid robots creating multiple layers of long-term growth.

Full Self-Driving (FSD), robotaxis, and the broader autonomy stack are emerging as TSLA’s most powerful growth engine, transforming the business from vehicle seller into a recurring, high-margin software and mobility-as-a-service platform.

The strategic pivot will help Tesla improve its long-term financial profile, which includes business performance trends, economic profit, and return on capital. Besides autonomy and AI initiatives, the firm also highlighted Tesla’s Semi program, expected to enter its first year of high-volume production ramp in 2026. The company’s energy and storage business also adds a powerful, higher quality leg to the investment case.

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

While we acknowledge the potential of TSLA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.