Tesla's shares fell about 2% on Friday, with options traders paying up to protect against further declines. Wall Street analysts remain cautious on the electric vehicle maker's pivot toward artificial intelligence and robotics, citing recent revenue drops and production changes. Despite the concerns, some see potential in Tesla's energy business, particularly Megapack batteries for AI data centers.
Tesla Inc. (NASDAQ:TSLA) saw its stock slip approximately 2% on Friday, reflecting investor caution over the company's strategic direction. Options market activity indicated traders are not anticipating a crash but are increasing protections against additional downside, as the stock relies heavily on momentum and investor belief.
Analysts on Wall Street have labeled Tesla investments as "risky" in 2026, with shares down over 9% that year. This follows a notable shift toward AI efforts and robotics, including the release of the Optimus humanoid robot. Late last month, Tesla announced it would cease production of its Model S and Model X vehicles to repurpose the Fremont factory for manufacturing Optimus robots. This move aligns with broader trends among tech giants toward AI, though it has raised concerns about diverting focus from core vehicle operations.
Financial performance has underwhelmed, with a 3% year-over-year revenue decline and an 11% drop in automotive revenue, marking Tesla's first annual sales decline. In the latest quarter, the company sold 418,227 units, a 4.9% annual decline over the past two years, suggesting possible market saturation or rising competition that could pressure prices and profitability.
On a positive note, a report from William Blair analyst Jed Dorsheimer highlighted opportunities in Tesla's energy segment, particularly Megapack batteries, driven by demand from expanding AI data centers. Over the past six months, Tesla shares outperformed the S&P 500 by 10.8%, and the company aims to reach $600 per share in the next 12 months. Meanwhile, analysts favor alternatives like Amazon (AMZN) and Alphabet (GOOGL), the latter's Waymo unit being a key rival in autonomous driving.