Piper Sandler: Tesla's AI and robotics potential is severely underestimated, with a target price aimed at $500

According to the Zhitong Finance APP, if Tesla's (TSLA.US) stock price of $400 per share already encompasses the full value of its electric vehicle and energy businesses, then Optimus, autonomous taxis, and artificial intelligence represent the potential upside that investors can obtain for free—this is the latest view from Piper Sandler analyst Alexander Potter. Despite Tesla facing execution risks recently, he maintains a target price of $500.

Based on the 20-year discounted cash flow model established by Piper Sandler, Tesla's existing 17 business segments—which cover everything from electric vehicle manufacturing, energy storage solutions, supercharging networks to FSD autonomous driving software and car insurance—are sufficient to support a valuation benchmark of $400 per share. This means that the remaining value in the agency's target price mainly reflects the potential upside of Optimus, autonomous taxis, and AI-related services.

The core logic of this report is that the market currently severely underestimates the valuation premium of Tesla's transition from a traditional manufacturing company to an AI infrastructure provider. Analyst Potter believes that with Tesla's technological breakthroughs in robotics, the long-term value of Optimus and its associated "Inference-as-a-Service" business could ultimately surpass the total of all of Tesla's current core businesses, but he also warns that execution risks remain high in the short term.

As of the time of writing, the stock rose 3.89% on Monday, closing at $445, with a cumulative increase of over 13% in the past week, as investor optimism about artificial intelligence and autonomous driving continues to soar.

Meanwhile, Tesla's latest developments in macro strategy and technology implementation also support this optimistic expectation. In the field of autonomous driving, Tesla is leveraging its large global fleet to accumulate vast amounts of real driving data, with the iteration speed of its FSD system showing exponential growth. Particularly, with Elon Musk's recent frequent international visits, there is widespread expectation that the FSD system is likely to achieve significant regulatory approval breakthroughs in China, a strategic market.

On the hardware front, Tesla has clarified its production timeline, planning to achieve the initial deployment of the Optimus robot in its own factories by the end of 2026, performing actual production tasks such as parts handling, marking a turning point for humanoid robots moving from the laboratory to industrial applications.

Although there are significant differences in valuation on Wall Street regarding Tesla, with some more conservative institutions warning that its stock price volatility exhibits more "meme stock" characteristics, Piper Sandler's report undoubtedly reinforces Tesla's narrative position as an "AI leader." Analysts emphasize that Tesla, with its strong capital strength, can raise substantial funds without significantly diluting existing shareholders' equity to accelerate AI computing power and robot mass production.

Additionally, according to the latest analyst report from Seeking Alpha, Tesla currently has nearly 4 million vehicles equipped with FSD capabilities on global roads, with a total daily mileage of 30 to 40 million miles. Every mile driven accumulates more real driving data, helping the company improve its AI systems more quickly