Goldman Sachs has lowered its price objective on Tesla (NASDAQ:TSLA) to $405.00 from $420.00, while keeping a Neutral recommendation on the electric vehicle maker. At the time referenced in this report, Tesla shares were quoted at $431.46. InvestingPro figures show Tesla carries a market capitalization of $1.43 trillion and trades at a price-to-earnings ratio approaching 300, a valuation multiple Goldman appears to view as elevated relative to the firm usiness risks.
The adjustment in Goldman nalysts xpectations coincides with Tesla onscious shift of resources toward artificial intelligence-focused programs. Those programs include the company ull Self-Driving (FSD) software, development of robotaxi services and broader robotics efforts. Goldman Sachs analyst Mark Delaney indicated the company plans to lift capital expenditure above $20 billion in 2026, with part of that spending earmarked for AI training compute infrastructure.
Balance sheet metrics referenced by InvestingPro show Tesla holds more cash than debt, a position that should ease the financing of aggressive capital commitments. Tesla lso appears to be making operational headway on its AI initiatives: FSD (Supervised) v14 has drawn favorable reviews from outlets such as Barron nd MotorTrend, and the company has initiated limited commercial robotaxi operations in Austin without safety monitors or trailing cars.
Despite product and technological progress, Goldman Sachs warned that intensifying competition could curb Tesla uture profit growth. The firm pointed to Waymo xpansion plans - specifically intentions to more than double the number of operational locations within the year - and to Nvidia nnouncing plans to open source its Alpamayo model and tools, both developments Goldman views as competitive pressures on Tesla I and autonomy ambitions.
Additional margin pressure may come from the international EV market, where Chinese automakers are expanding beyond their domestic market and adding competitive supply. Operational changes at Tesla were also flagged: the company is set to wind down Model S and Model X production during the year and will repurpose that manufacturing capacity over time to support its humanoid robot, Optimus. Tesla expects to begin shipping Optimus units to third-party customers starting in 2027.
InvestingPro assigns Tesla a "FAIR" overall financial health score of 2.32. On the results front, Tesla posted fourth-quarter revenue of $25 billion and reported earnings per share of $0.50, which closely matched consensus expectations of $25.1 billion in revenue and $0.45 EPS. The company also reported an improvement in its automotive gross margin excluding credits - rising to 17.9%, a sequential gain of 250 basis points.
The market response to Tesla arnings and strategic pivot has produced a range of analyst reactions. Mizuho increased its price target to $540 while keeping an Outperform rating and cited Tesla I shift as a driver. Baird reiterated an Outperform rating with a $548 target, highlighting Tesla apital spending plans, which the firm noted have doubled for 2026 to over $20 billion. RBC Capital preserved a $500 price target, also referencing the planned capex increases. By contrast, Jefferies maintained a Hold stance with a $300 target after recognizing a strong beat on core auto margin and cash metrics. Truist Securities marginally trimmed its target to $438 but retained a Hold rating following the modest revenue and gross margin gains reported for the quarter.
The divergence in analyst valuations and recommendations underscores a split view on how Tesla apital intensity, AI investments and intensifying competition will translate into returns. Goldman ppears to be reflecting that uncertainty in a lower target and a Neutral rating, while other firms either raise targets or flag continued upside tied to Tesla xecution on AI and robotics.
Contextual note: The financial and operational figures cited above are drawn from recent company disclosures and InvestingPro data as described in this report. The material summarizes analysts nd data-provider views without introducing additional projections beyond those explicitly stated.