Tesla Shares Rise As Musk Outlines AI Pivot And End Of Model S And X Production

Core Insights - Tesla shares increased by over 3.3% in premarket trading despite reporting its first-ever annual revenue decline, as CEO Elon Musk announced a strategic pivot towards AI and robotics [1][2] Group 1: Financial Performance - Tesla's fourth quarter 2025 earnings report narrowly exceeded Wall Street forecasts, but it marked the company's first annual revenue decline [2][3] Group 2: Strategic Shift - The company will cease production of its premium Model S and Model X vehicles to focus on manufacturing humanoid robots named Optimus at its Fremont, California facility [3][4] - Musk expressed optimism about the future, stating that the growth of AI and robotics will usher in an era of abundance [3] Group 3: Long-term Goals - Tesla aims to produce 1 million units of the Optimus robot at its California plant, indicating a significant shift in its production strategy [4] Group 4: Investment in AI - Tesla announced a $2 billion investment in xAI, Musk's artificial intelligence company, as part of its latest funding round, despite previous lukewarm responses from investors [5] - The investment aligns with Tesla's goal of integrating AI into physical products and services, while xAI focuses on developing digital AI solutions [5]