Wells Fargo: Tesla’s Upside Is Physical AI, Not Cars — Near‑Term Caution Could Rock Crypto

Wells Fargo sees Tesla’s upside coming from AI — not cars — but is cautious near term Wall Street is increasingly framing Tesla’s future around “physical AI” rather than vehicle volume, and Wells Fargo’s analysts are among those who expect big long-term gains from the company’s AI initiatives. At the same time, the bank remains cautious about the near-term outlook: on Feb. 13 it reiterated an “Underweight” rating for TSLA, citing continued weakness in delivery numbers. The shift from cars to robots gained momentum late last month when Tesla said it would halt production of the Model S and Model X at its Fremont plant to retool the line for manufacturing Optimus humanoid robots. That operational shift comes amid Tesla’s first-ever annual sales decline — total revenue fell 3% year‑over‑year and automotive revenue dropped 11% — and has helped fuel the narrative that Tesla is pivoting full force toward AI-driven businesses. Market reaction has been mixed. TSLA is down about 7.5% year‑to‑date, a slump analysts attribute largely to soft sales and delivery figures, with some also pointing to investor concern over Tesla’s broader strategic pivot. CEO Elon Musk has reframed the company mission around ambitions like “amazing abundance” and an AI-led future, and his moves to align xAI and SpaceX with Tesla have added to the uncertainty and debate among investors. Still, Wells Fargo and other observers view Tesla’s physical AI push as a multi-layered, multi-year growth opportunity that could ultimately drive the stock to new highs — just not via traditional car sales in the near term. On the product side, Tesla continued to expand its AI footprint: Grok, the company’s AI assistant, launched in Europe (UK and other EU markets) via software update 2026.2.6. The feature is being distributed free to eligible vehicles equipped with AMD Ryzen processors. Despite the rollout, TSLA traded about 2.9% lower at the time of reporting. For crypto-focused readers, Tesla’s strategic pivot matters beyond automotive markets: shifts in Musk’s priorities and public sentiment can ripple across risk assets and digital-asset communities that follow his commentary and company moves closely. Read more AI-generated news on: undefined/news