Goldman Sachs Lowers Tesla’s Price Target to $405

Goldman Sachs analyst Mark Delaney lowered the price target on Tesla to $405 (from $420) while maintaining a ‘Neutral’ rating.

“While a large part of Tesla’s implied valuation has long been tied to future profits associated with its AI related efforts (e.g.

FSD, robotaxis, robotics), we believe success in these areas will be even more in focus going forward given the company’s planned increase in capex (to $20 bn+ for Tesla in total in 2026, in part to fund its AI training compute, and we now expect negative overall FCF this year for Tesla) and plans for its auto business (including winding down S/X production this year and converting the space over time for Optimus).

We continue to believe Tesla is making progress in its AI related efforts, especially with FSD (Supervised) v14 where some users have reported driving multiple thousands of miles between critical intervention on X and FSD v14 getting several positive reviews (e.g. from Barron’s and MotorTrend).

Tesla also stated that a limited number of robotaxis are now operating commercially in Austin without a safety monitor or trail car, and Tesla’s CEO recently commented that the company plans to ship Optimus to external customers starting in 2027.

While we continue to believe that Tesla will grow its broader AI related businesses over time (with the company having competitive strengths in our view including with its data access, engineering capabilities, and vertical integration/cost), we also expect competition to moderate the degree of profit growth.

For example, Waymo plans to more than double its locations this year from the 5 cities it was operating in exiting 2025, and Nvidia announced plans at CES to open source its Alpamayo model and tools.

We previously detailed a $7-$9 median case scenario for 2030 EPS (up from $1.09 including SBC and $1.66 ex. SBC in 2025), and we see that degree of growth as reflected in the stock and maintain our Neutral rating.

Tesla is also facing a high degree of competition internationally in EVs, especially from Chinese auto OEMs (and increasingly beyond the China market).”

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