Dan Ives: Tesla Is ‘Morphing into a Physical AI Stalwart’ So Don’t Sweat the CapEx and Just Buy TSLA Stock

Electric vehicle-making behemoth Tesla (TSLA) recently reported its first-quarter results, grabbing eyeballs on Wall Street. One of the largest factors that affected how the results were perceived was the company’s rising capital expenditures. The company’s Q1 CapEx increased by 67% from the year-ago value to $2.49 billion. Furthermore, it expects its CapEx to reach $25 billion this year. 

Tesla has been investing heavily to transform itself from an EV maker into a company pioneering physical AI (such as robotaxis and its Optimus robot). However, this might put its cash flow under pressure in the near term. Wedbush’s Dan Ives believes that the huge CapEx is necessary to achieve its goal of “morphing into a physical AI stalwart,” maintaining a bullish “Outperform” rating on the stock and a Street-high $600 price target.