Truist Reiterates Hold on Tesla, Sees Long Path Ahead for Physical AI Projects

Core Viewpoint - Truist Securities maintains a Hold rating and a $406 price target on Tesla Inc, indicating that while the approval of CEO Elon Musk's compensation package alleviates some concerns, the company's long-term value is still dependent on unproven AI initiatives [1][2]. Group 1: CEO Compensation and Shareholder Sentiment - The shareholder vote in favor of Musk's equity award has reduced worries about his potential shift in focus to other projects, such as xAI [2]. - The approval of Musk's compensation package is seen as a positive development for investor sentiment [1]. Group 2: Growth Opportunities and Revenue Contribution - Tesla's primary growth opportunities, including the Full Self-Driving (FSD) system, robotaxi ambitions, and the Optimus humanoid robot, are still in early stages and have made limited revenue contributions thus far [2]. - Analysts describe the progress of Tesla's FSD as "impressive but not yet performing as expected," highlighting the challenges for investors despite the excitement surrounding AI innovations [3]. Group 3: Price Target and Investment Outlook - Truist maintains its price target of $406 based on a discounted cash flow analysis, reiterating a Hold rating for Tesla [3].