Piper Sandler analyst Alex Potter published a new report about Tesla on Monday, and he details how buyers can purchase shares today and receive the company’s robotics business at no extra charge.
He sets a 500 dollar price target for the stock, adding new artificial intelligence and robot segments to the automaker’s traditional operations. This updated target arrives as the company pushes hard into new technology sectors, and Potter thinks the core car business is strong enough to support most of the current stock price, meaning the rest comes as a bonus.
Breaking down the core valuation
Potter studied 17 different product categories to find the base value of the company. These divisions include the main car business, battery storage, supercharging stations, and software subscriptions like Full Self-Driving. Next he used a 20-year cash flow model to price these divisions at roughly 400 dollars per share. But this base number completely leaves out any future earnings from the Optimus humanoid robot or artificial intelligence inference services.
Potter reached his 400 dollar baseline by modeling out the cash these 17 businesses will produce over the next two decades, and he applied a discount rate to bring those future earnings back to a present value. He expects the energy storage division, which sells massive battery packs to power companies, to grow fast and support the overall number. The supercharging network adds another stable revenue stream, giving the company reliable cash flow. But he left the robot and artificial intelligence services out of this math entirely.
The math works out well for people buying the stock right now, as the stock traded near the low-420s when the report came out, so buyers pay just a slight premium over the baseline estimate. As a result, they get exposure to a high-upside robotics venture without an explicit price tag attached.
Getting robotics and artificial intelligence at no cost
The analyst wrote a specific note to clients about this setup, and his wording was very clear. “At $400/share, we think investors can buy Optimus for free,” Potter wrote. Later he applies the extra 100 dollars per share to reach his final 500 dollar target. That extra money accounts for the potential scale of humanoid robots and autonomous services, which could eventually dwarf regular car sales.
Optimus is the humanoid robot project the company has developed over the last few years, and the engineers want to use these robots for internal factory work, but they plan to sell them for broader commercial labor applications later. At the same time, the company plans to make money from its artificial intelligence models by renting out computing systems to other firms, and this is known as inference-as-a-service. Potter notes these segments could end up being worth more than all the existing businesses combined, adding massive potential to the stock.
Moving focus to new data metrics
Wall Street used to judge the automaker strictly by vehicle deliveries and profit margins. Potter argues those traditional numbers count for less today, and he expects different data to guide the market. He believes Full Self-Driving subscriber counts and robotaxi data will take center stage. What happens next for the market? Instead investors will start to look at usage rates and safety statistics, moving past standard car sales.
This perspective builds on his past research about the fast improvement in the self-driving software. For example, he previously noted massive improvements after the company released a new software version. Those updates included a huge jump in the distance cars can travel before human drivers need to take over, proving the technology is advancing fast. As the company moves closer to unsupervised driving and possible robotaxi launches, the market will care more about software monetization.
The robotaxi project acts as another huge piece of this valuation puzzle. The automaker wants to build cars without steering wheels or pedals, and they plan to run them in a dedicated ride-hailing network. Analysts say this service could generate high profit margins compared to selling cars one by one, and company filings indicate the team is spending billions on artificial intelligence computers to train the self-driving system. All this spending aims to create a software system that can drive safer than a human.
A very high earnings multiple
The analyst relies on a very high earnings multiple to reach his baseline number. His model runs on a 233 times price-to-earnings ratio for projected 2027 profits, and this ratio is much higher than his previous 180 times estimate. He admits this framework assumes the company will keep its massive lead over older car brands in software and battery tech. Analysts say this high valuation is a major part of the overall investment theory.
If the company hits these targets, shareholders could see massive returns from the autonomous and robotics divisions. Still, the entire prediction relies on solving tough regulatory and technical problems over the next few years. The company has to actually build and sell humanoid robots at scale, and they have to launch a working robotaxi network.
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