Oppenheimer reiterated its Perform rating on Tesla, citing the company's shift to a fully integrated Physical AI platform, moving away from pricing based solely on the vehicle story.

The brokerage noted that Tesla's execution in extending vertical integration and improving key supply chain aspects is acceptable, and described its self-developed semiconductor manufacturing as a bold yet crucial step: optimizing performance for high-leverage components while reducing exposure to supply chain risks from China's geopolitical expansion. The institutional knowledge accumulated by Dojo is said to determine whether Tesla can iterate chips ahead of its peers in various forms.

In line with this logic, capital expenditure is viewed as a leading indicator of whether Physical AI will succeed. The firm has previously raised its capital expenditure expectations for 2026 and 2027 to $29.4 billion and $30.4 billion, respectively, primarily due to upward revisions in data center and semiconductor spending, with the 2026 estimate being about 25% higher than the market. Whether power capacity can be launched on schedule and whether the learning cycle can accelerate are considered more critical observation points than quarterly vehicle sales.

On the product side, innovations in Cybercab manufacturing and computing power expansion are highlighted, while it is noted that vertical integration will take years to close the loop, and the timelines for Cybercab and Optimus may continue to be pushed back. In 2026, free cash flow may turn negative again due to factory construction, and the Robotaxi fleet may operate off-balance sheet. Valuation still corresponds to an extremely high price-to-earnings ratio, with cash on hand exceeding debt.

Buyers are revaluing Tesla as a growth fund for an energy-chip-automobile-robotics closed loop; sellers are focused on the profitability of the vehicle business and the timing of cash realization. The event-driven aspect is that the rating remains unchanged but the narrative has been rewritten: a neutral rating paired with platform theory means neither chasing highs nor downgrading. Beneficiaries are those exposed to chips, energy storage, and autonomous driving software; those under pressure are shorts still valuing Tesla based on the automotive cycle.

The market is trading on how much usable computing power, electricity, and learning speed can be obtained for every dollar of capital expenditure, not just another maintained rating.

Source: Public Information