Key insights
- Wedbush reiterated its outperform rating on Tesla after the announcement of new chip manufacturing facilities. Tesla plans to build two advanced chip factories in Austin, Texas, to support its AI strategy. The plants will power Tesla's cars, Optimus robots, and AI data centers in space. The news is tempered by an ongoing NHTSA investigation into Tesla's Full Self-Driving system, but the chip factory plans signal long-term growth potential.
Investing.com - Wedbush maintained an Outperform rating and $600.00 price target on Tesla Inc. (NASDAQ:TSLA) following the company’s announcement of new chip manufacturing facilities. The stock currently trades at $383.98, down 15% year-to-date, though InvestingPro analysis suggests the shares are overvalued relative to Fair Value—placing Tesla among the market’s most overvalued stocks.
Elon Musk announced that SpaceX and Tesla will build two advanced chip factories in Austin, Texas. The company plans to construct a Terafab facility to meet demand for chip technology supporting Tesla’s AI strategy. An InvestingPro tip notes Tesla holds more cash than debt on its balance sheet, providing financial flexibility for such capital-intensive projects.
One factory will focus on powering Tesla’s cars and Optimus humanoid robots. The other will be designed for AI data centers in space, with Musk targeting 1 terrawatt of capacity annually, approximately twice current U.S. production.
Wedbush noted that current suppliers, including Micron, TSMC, and Samsung, are unable to meet future demand for Tesla’s AI strategy. The firm stated that chip and memory supply is expected to be the greatest constraint for the company’s AI ambitions.
The timeline for the project remains uncertain. Wedbush stated this represents "the first step to ultimately what will be Tesla and SpaceX combining forces in a merger likely in 2027."
In other recent news, Tesla’s financial performance and regulatory challenges have drawn significant attention. Stifel reiterated its Buy rating for Tesla, highlighting a strong gross margin of 20.1% in the fourth quarter of 2025, driven by robust automotive margins despite facing over $500 million in tariff impacts. Meanwhile, the U.S. National Highway Traffic Safety Administration intensified its investigation into Tesla’s Full Self-Driving system, upgrading it to a detailed engineering analysis covering approximately 3.2 million vehicles. This escalation has led GLJ Research to maintain a Sell rating on Tesla, with concerns over the Full Self-Driving recall risk.
Barclays also maintained its Equalweight rating on Tesla, noting that the company might face increased capital expenditures beyond the previously estimated $20 billion. Morgan Stanley reiterated its Equalweight rating, citing Tesla’s progress in scaling its unsupervised robotaxi fleet as a key factor for the stock’s performance this year. The advancement in the robotaxi fleet is expected to enhance learning for personal Full Self-Driving systems, potentially increasing demand and improving cash flow. These developments reflect a mix of financial strength and regulatory hurdles for Tesla in the current market landscape.
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