Goldman Sachs Says Tesla’s Robotaxis and AI Matter More Than Q3 Earnings

Goldman Sachs has maintained a Neutral rating for Tesla (TSLA) with a price target of $360, suggesting a 6% downside from current levels. The investment bank believes that Tesla’s stock performance will be more influenced by updates on its AI and robotics divisions than by its upcoming third-quarter earnings report.

Tesla’s Full Self-Driving (FSD) technology continues to make progress in Europe, with Croatia recently approving FSD (Supervised). Other countries like the Netherlands, Belgium, and Slovenia have also granted approval. However, a crucial EU-wide vote on FSD approval has been delayed and may not occur before December.

The company is also expanding its robotaxi network, though at a slower pace than initially projected by Elon Musk. Tesla has begun limited service of its Cybercab in Austin, which lacks a steering wheel or pedals. By the end of Q2, the Robotaxi network was operational in seven major U.S. metros.

Tesla is ramping up production of its Optimus humanoid robots at its Fremont factory. Musk has described humanoid robots as a potentially massive business but has cautioned that manufacturing Optimus at scale presents significant challenges due to the need for entirely new supply chains.

Looking ahead to Q3 earnings, Tesla is expected to report revenue of $28.24 billion, up 26%, with adjusted earnings per share of $0.33, slightly below analyst estimates. Goldman Sachs anticipates stronger revenue momentum from Tesla’s vehicle business but warns that higher costs and capital spending could limit earnings growth.

Despite a recent recovery, TSLA shares are down more than 13% year-to-date, making it the only stock in the Magnificent 7 cohort trading in the red. Retail sentiment on Stocktwits remains bullish.