Tesla (TSLA) Stock: The $400 Billion Robot Business Wall Street Is Betting On

TLDR

• Tesla stock rose 1.7% to $454.48 on Thursday, following a 4.1% gain on Wednesday, driven by optimism around humanoid robots
• Analysts project Tesla’s Optimus robot could generate $400 billion in sales by 2050, with valuations ranging from $111 to $640 per share
• CEO Elon Musk aims to sell Optimus robots to external customers by 2026, with a goal of one million units sold by 2035
• Wall Street estimates Optimus could cost around $20,000 per unit with a 50% gross margin, though no firm pricing exists yet
• Tesla launched a new lower-priced Model 3 Standard in Europe at €37,970 in Germany to compete with cheaper EV offerings

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Tesla stock closed at $454.48 on Thursday, up 1.7% for the day. The gain came after a 4.1% jump on Wednesday that was fueled by optimism around the company’s humanoid robot plans.

Tesla, Inc., TSLA

It’s only the 13th time Tesla stock has closed above $450. The last time was about a month ago on Nov. 5.

The recent rally started after Barclays analyst Dan Levy published a research note about potential government support for robotics. He wrote that the White House was considering a possible 2026 executive order related to humanoid robots.

Levy said increased government involvement could boost excitement around Tesla’s Optimus robot. Optimus is still in development and not available for purchase yet.

Tesla CEO Elon Musk hopes to start selling Optimus to outside customers by 2026. But there’s no firm price, cost, or demand data available for investors to analyze.

Wall Street Takes a Guess at Robot Revenue

That hasn’t stopped analysts from making projections. Baird analyst Ben Kallo upgraded Tesla stock to Buy from Hold in September.

He based his calculations on Musk’s comments about a $20,000 per unit cost. Kallo assumed a 50% gross margin for the robots.

RBC analyst Tom Narayan went much further with his estimates. He projects $400 billion in robot sales by 2050.

Narayan values those sales at 10 times revenue. After discounting that value back to today, he calculates robots account for more than one-third of his total Tesla valuation.

His price target is $500, which values Tesla at over $1.5 trillion. The robot business alone is worth about $640 billion in his model.

Shorter-Term Robot Projections

Deutsche Bank analyst Edison Yu takes a more conservative approach. He doesn’t look out to 2050 like Narayan does.

Yu projects 1.25 million robots sold in 2035 at around $25,000 each. That works out to $31 billion in revenue.

He applies a 30 times multiple to that revenue. After discounting, Yu says the robot business is worth about $111 per share today.

Yu rates Tesla shares Buy with a $470 price target. All three analysts covering the robot opportunity rate the stock as a Buy.

The projections are highly speculative since no one sells truly useful humanoid robots yet. But Musk has personal motivation to make robots work.

His recently adopted trillion-dollar pay package includes a robot goal. Tesla needs to sell one million robots total by 2035 for him to hit that milestone.

If the bullish analysts are right, hitting that number should be easy. The most optimistic projections have Tesla selling far more than one million units by that date.

New Budget Model Hits Europe

On Friday, Tesla launched a new lower-priced Model 3 in Europe. The Model 3 Standard is designed to boost demand as competition heats up.

European and Chinese EV makers are offering more affordable models. Tesla is responding with cheaper options.

The Model 3 Standard costs €37,970 in Germany and 449,990 Swedish crowns in Sweden. That’s about $44,256 and $47,849 respectively.

The model sells for $36,990 in the U.S., where it launched a few months ago. Tesla also launched a lower-priced Model Y crossover in Europe in October.

Shares were up 0.22% in premarket trading Friday at $455.32.

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