Despite AI Potential Being 'Limitless,' Analysts: Don't Rush to Buy Tesla

According to Barron's, while Tesla (TSLA-US) possesses 'limitless' growth potential in the field of artificial intelligence, at least one Wall Street analyst believes investors should refrain from buying Tesla stock at this stage.

Andrew Boone, an analyst at Citizens, has initiated coverage on Tesla with a 'Hold' rating and did not provide a target price.

Boone's research focuses on Tesla's physical AI strategy—integrating AI computing power into real-world interactive devices such as autonomous robotaxis and humanoid robots.

He acknowledges that both businesses have significant growth potential but notes they are still years away from generating meaningful revenue and profit for the company. Additionally, if the Robotaxi rollout progresses slower than market expectations, it could ultimately disappoint investors.

In his report, Boone stated that Tesla already possesses "all the key assets necessary to drive technological leaps and create a truly abundant society through labor automation," including AI models, semiconductors, advanced manufacturing capabilities, battery technology, and CEO Elon Musk. "However, this grand vision will take time to materialize, and we believe the market is overly optimistic about Tesla's near-term prospects."

Tesla first launched its Robotaxi service in Austin, Texas, in June 2025, and has since expanded to a few select cities. However, the company estimates that the autonomous taxi service won't begin generating significant revenue and profit until at earliest 2027. Despite the Robotaxi business not yet contributing materially to financial performance, Tesla's stock has risen approximately 65% since the service officially launched in Austin through Thursday.

On Thursday, Tesla's shares rose 3.2%, closing at $406.55. On the same day, the S&P 500 index gained 0.8%, and the Dow Jones Industrial Average rose 0.3%.

This slightly conservative rating has not noticeably impacted the stock price. As of Thursday's pre-market session, Tesla had declined about 6% over the past two trading days, leaving its weekly performance roughly flat.

Overall, about 40% of analysts currently covering Tesla rate it a 'Buy.' The average 'Buy' rating ratio for S&P 500 components typically ranges between 55% and 60%.

According to FactSet, the average Wall Street analyst target price for Tesla is approximately $406—nearly identical to the latest share price—suggesting that analysts broadly believe Tesla's stock has limited upside potential in the short term.