Tesla’s shareholder approval of Elon Musk’s new $1 trillion compensation plan has removed a major overhang, but analysts say the stock’s outlook remains “tricky” given that most of its future value still hinges on unproven AI ventures.
Truist Securities analyst William Stein said the decision to retain Musk was “imperative for the company’s success,” noting the package is strongly aligned with shareholder interests because it pays out only if Tesla achieves steep market capitalization and operational milestones.
The new compensation plan is primarily intended to secure Musk’s leadership and voting influence rather than its dollar value, as Tesla’s physical AI initiatives become a more concrete driver of the company’s long-term value, Stein said.
He estimates only 11% of Tesla’s valuation is tied to the car business and another 11% to energy, with roughly two-thirds linked to AI-driven initiatives such as Full Self-Driving (FSD), robotaxis, and humanoid robots.
“We continue to see TSLA as much more of a physical AI company than a car company,” the analyst said.
However, Stein cautioned that “all of these projects are quite unproven (close to zero revenue)” and said its review of FSD showed the system is “impressive, but not yet working as expected.”
The robotaxi service “is just getting going” and will likely stay limited until FSD achieves flawless performance.
Meanwhile, the Optimus humanoid robot remains at a prototype stage. “The last view we had of this project … was of a Mechanical Turk," he said.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. “So, while it’s a zero today, if we expect this will eventually be a general purpose robot combining human-like dexterity with super-human intelligence, it’s quite easy to adopt a view that Optimus could sell millions per year for $30k each,” Stein added.
Given Tesla’s valuation — trading at more than 200 times 2026 consensus earnings — Stein said the stock already reflects a substantial amount of future AI success.
“Because the physical AI projects are so uncertain, it’s difficult to recommend the stock,” the analyst wrote.
Although the setup has improved with Musk’s continued leadership, the payoff from physical AI “is still a long way off,” he said.
Truist reiterated its Hold rating and $406 price target on Tesla.
