• Piper Sandler says Tesla's core business justifies the current stock price, making Optimus a potential free upside.
  • Analyst Alexander Potter values Tesla at $400 without Optimus, maintaining a $500 price target.
  • Optimus and AI could become Tesla's most valuable assets, but execution risk remains high.

A $400 Stock Without the Robot

Piper Sandler analyst Alexander Potter argues that Tesla's stock already reflects the value of its electric vehicle and energy businesses, meaning investors are effectively getting the Optimus humanoid robot for free. In a note to clients, Potter said Tesla's core operations are worth about $400 per share, while he maintains a $500 price target—implying the $100 premium represents the potential from AI and robotics.

"Tesla's AI and robot businesses could become its most valuable assets over time," Potter wrote, though he cautioned that "near-term execution risk is high." The note comes as Tesla prepares to scale Optimus production, with CEO Elon Musk recently hinting at a timeline for broader deployment.

A Tale of Two Valuations

The split valuation approach reflects a growing debate among analysts: is Tesla an automaker with a robotics side project, or a robotics-and-AI company that also makes cars? Potter's model sides with the latter, but only as a long-term story. "Without Optimus, we see Tesla as fairly valued at current levels," he said. The $100 gap, however, suggests that any tangible progress on the robot could drive significant upside.

Tesla shares have been volatile this year, trading between $350 and $450 over the past six months. The stock was up 2.3% in early trading following the report.

The Optimus Timeline

Tesla first unveiled the Optimus concept in 2021, with prototypes showcased in subsequent years. Musk has framed the robot as a key growth driver, potentially transforming manufacturing and service industries. However, previous deadlines have slipped, and the company has yet to demonstrate mass production capability. "We're working toward a few thousand units next year, but that's aspirational," a person familiar with the matter said.

Competition is also heating up, with companies like Boston Dynamics and Figure AI racing to commercialize humanoid robots. Regulatory hurdles around safety and labor displacement could further delay widespread adoption.

What's Priced In?

Piper Sandler's analysis implies that Optimus is not yet priced into the stock, giving investors a free option on Tesla's robotics ambitions. However, some analysts warn that the robot's value is highly speculative. "If Optimus never materializes at scale, Tesla's stock could face a de-rating," said one rival analyst who declined to be named. "But if it works, it could dwarf the auto business."

For now, Potter's note reinforces the narrative that Tesla's AI and robotics potential is a key reason to own the stock. "Investors should focus on the long-term optionality," he wrote.

Correction: An earlier version of this article misstated the timeline for Optimus production. The target is for a few thousand units next year, not this year.