Tesla Stock Heads For Another Red Day: Munster Backs $25B Capex Push, Retail Stays Bullish

• Tesla said 2026 capex will exceed $25 billion, targeting autonomy, robotics, AI training infrastructure, chip development and manufacturing.
• Munster said the capex ramp boosts Tesla’s lead in “physical AI.”
• Tesla warned that free cash flow could turn negative later this year as spending accelerates.

Shares of Tesla, Inc. (TSLA) slid over 2% in premarket trading on Thursday, even as analysts said the company’s $25 billion capex push could widen its lead in AI, robotics and robotaxis.

Tesla reported adjusted earnings per share (EPS) of $0.41 for the first quarter (Q1), ahead of the $0.36 consensus estimate, while revenue of $22.39 billion matched expectations. The EV maker also said its capex will exceed $25 billion this year as it ramps up spending across autonomy, robotics, chip development and manufacturing.

TSLA stock snapped two sessions of losses on Wednesday to end 0.3% higher at $387.51.

Munster: Tesla's Capex Push Widens AI Gap With Rivals

Deepwater Asset Management managing partner Gene Munster said that investor concerns about rising capex overlook the importance of the shift. “The market’s concern around higher Capex misses the point: Tesla is getting more aggressive to capitalize on the physical AI opportunity,” he said.

Munster noted that automotive gross margin, excluding regulatory credits, hit 19.2%, ahead of consensus estimates of 17.5% and above 17.9% in the previous quarter. He called profitability the “clearest positive” from the quarter and said delivery comments from the conference call for the rest of the year pointed to growth “in line with the Street.”

He also said that the spending ramp supports investments spanning battery improvements, AI training infrastructure, Terrafab manufacturing systems, Optimus robotics and the Cybercab platform. 

“It has become clearer that traditional auto is not Tesla’s competition, and at this time, it is hard for me to pinpoint a strong competitor that is thinking about getting aggressive to go after physical AI,” Munster said.

However, he cautioned that major autonomy milestones are unlikely to arrive immediately. “FSD, Robotaxi, and Optimus remain massive opportunities, but don’t expect a breakout in the next quarter,” Munster said.

TD Cowen: Eyes-Off FSD Is A Major Catalyst Ahead

Separately, TD Cowen reiterated a ‘Buy’ rating on Tesla with a $490 price target, implying a 26% upside from current levels. The brokerage said Tesla is entering a catalyst-heavy phase supported by Cybercab rollout progress, RoboTaxi expansion, early “eyes-off” Full Self-Driving (FSD) deployments, Optimus V3 development and Semi commercialization.

TD Cowen called eyes-off autonomy capability a potential catalyst late this year or early next year and said Tesla could also benefit from a looming U.S. EV comeback.

One-Time Items Cloud TSLA Profitability 

Despite the bullish analyst outlook, investors continued to question the quality of Tesla’s quarterly profitability. Short seller Jim Chanos said most operating income came from non-recurring items, including tariff recognitions, warranty reserve reversals and regulatory credit sales, arguing the core business was “barely profitable” in the quarter. 

Tesla CFO Vaibhav Taneja also confirmed over $250 million in tariff-related benefits tied to duties paid earlier, particularly in the energy segment.

CEO Elon Musk also said on the conference call that vehicles equipped with Hardware 3 “simply does not have the capability,” to support unsupervised FSD. Tesla now plans to offer discounted trade-ins or hardware upgrades through new microfactory deployment centers. Some analysts said the move raises questions about whether reserves may eventually be needed to cover upgrade-related costs.

The EV maker also warned that free cash flow could turn negative over the remainder of the year as spending ramps.

How Do Retail Traders Feel About TSLA?

On Stocktwits, retail sentiment for TSLA has been ‘extremely bullish’ in the week leading up to its Q1 print amid a 328% jump in 24-hour message volumes.

So far this year, TSLA stock has lagged its “Magnificent Seven” peers, making it the group’s worst performer, with a 14% decline.

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