Tesla skeptics have continued to denigrate the prospects of its in-development bi-pedal robot, called Optimus, by terming it a diversionary side-show product. Now, however, seasoned Wall Street analysts are taking notice of Optimus' market-based opportunity for Tesla and hiking the company's stock price target as a consequence.
JUST IN: TESLA $TSLA PRICE-TARGET RAISED TO $400 (FROM $350) AT BANK OF AMERICA -- ANALYST SAYS "OPTIMUS IS REAL AND DEVELOPMENT IS POISED TO ACCELERATE"
"Optimus is currently used by TSLA to sort 4680 cells with no intervention. TSLA is testing Optimus in various use cases… pic.twitter.com/qC6L15UJTg
— Stock Talk (@stocktalkweekly) December 5, 2024
To wit, Bank of America (BofA) analyst John Murphy has attempted to delineate the upside potential for Tesla shares, originating from the still-in-development Optimus robot, in a new investment note today.
Murphy begins by pointing out that Tesla currently uses Optimus to perform menial tasks on the factory floor, which include the sorting of the "4680 cells with no intervention." Concurrently, the EV giant continues to test "Optimus in various use cases (i.e., catching a tennis ball) to refine the robot and determine a final design."
Murphy then notes:
"Optimus accounts for only a single-digit percentage of TSLA’s compute, but we expect the resources available for Optimus will grow as the robotaxi technology matures."
Tesla plans to deploy around 1,000 Optimus robots on its factory floors by the end of 2025, which should lead to an increase in the available compute resources for the company's bespoke robot.
Murphy believes this resource redirection "will drive an acceleration in the capabilities of Optimus, and ultimately lead to increased production in 2026+, thereby helping drive costs down."
While bringing up the possibility of a new capital-raising exercise from Tesla to accelerate the development of the Optimus robot, Murphy has raised BofA's stock price target for Tesla shares from $350 to $400, which corresponds to an upside potential of ~11 percent relative to the current stock price of $358.
For the benefit of those who might not be aware, Optimus leverages a neural network-trained, AI-equipped brain that allows it to interact with the external elements. The bipedal robot is currently capable of performing menial, labor-intensive tasks, with significant AI capabilities in the pipeline. Tesla's humanoid robot is able to leverage its bespoke neural network to map and navigate obstacles as well as track objects. Despite its heft, Optimus is equipped with sensitive tactile finger sensors that allow the bipedal robot to pick up an egg with finesse.
Bear in mind that Deutsche Bank sees Tesla's Optimus bringing in $10 billion in annual revenue by 2035, based on a sales volume of 200,000 units and an ASP of $50,000.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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