Bank of America and Citigroup are optimistic about Tesla's robot prospects, while Goldman Sachs takes a contrary view

Tesla (TSLA.US) has been frequently releasing updates on the development progress of its humanoid robot, with CEO Elon Musk telling shareholders that Optimus represents a multi-trillion-dollar opportunity for the company. Musk believes that Tesla will eventually produce tens of millions of Optimus robots each year.

Tesla released a new video showcasing its humanoid robot Optimus achieving a new milestone: walking autonomously outdoors. Tesla has already used some robots within its factories, and Musk stated that Tesla could start selling this robot to external customers as early as next year. He has set the price for each robot between $25,000 and $30,000.

Against this backdrop, electric vehicle manufacturer Tesla's stock price soared to a three-year high of $404.80 on Monday, before narrowing its gains due to optimism surrounding its Optimus robot project, ultimately closing around $390.

According to Zhitong Finance, an increasing number of analysts have pointed out in recent reports that the Optimus business has potential upside. Bank of America analyst John Murphy emphasized that Tesla aims to deploy 1,000 Optimus robots by the end of 2025, primarily within its factories, which will accelerate training and potentially speed up their development and capabilities.

Murphy also added that Optimus is currently only utilizing a small portion of Tesla's computing power, but as robot taxi technology advances, its resources are expected to expand. This could increase Optimus's production starting in 2026 and help reduce costs. Additionally, he suggested that Tesla might consider raising funds to finance additional computing power, which would further boost the robot project. Murphy is one of the most optimistic analysts on Tesla, rating it as "Buy" with a target price of $400.

Citigroup Global Insights analyst Wenyan Fei boldly predicted that the market size for humanoid robots could reach a staggering $7 trillion by 2050. He mentioned that Tesla's Optimus is a typical representative of humanoid robots currently under development, while there are over 50 different humanoid robots in the research and development stage on the market. Despite the enormous potential in the household market, analysts believe that humanoid robots are more likely to be widely used first in industrial environments and labor forces.

Citigroup Global Insights analyst Rob Garlick added that the return on investment cycle for humanoid robots could be very short, with substantial returns. He estimated that the payback period for some robots could be as short as 36 weeks. However, he also acknowledged that it is still unclear what the specific replacement rate of humanoid robots for human employees will be. At the same time, companies looking to deploy this technology still face significant financial challenges in increasing the production of humanoid robots.

However, some have remained skeptical, especially after Tesla's recent "We, Robot" event, where the fact that its robots are remotely operated was not transparent Contrary to Murphy's optimistic view, Goldman Sachs analyst Mark Delaney recently published a report indicating his skepticism about Tesla's growth in 2024. In fact, he expects electric vehicle deliveries to remain flat compared to 2023. Although Tesla's management anticipates a year-on-year increase in deliveries for the fourth quarter, expecting at least 515,000 units, Delaney's estimated figure based on regional sales data is slightly lower at 510,000 units. Therefore, he rates the stock as "Hold" with a target price of $250.

Overall, analysts have a consensus rating of "Hold" on Tesla's stock, based on ratings over the past three months, with 11 "Buy," 13 "Hold," and 9 "Sell" ratings. Tesla's current average target price is $244.88 per share, indicating downside risk