Tesla (TSLA) Stock Forecast & Price Target

Tesla is supported by improving core automotive profitability, with 3Q26 revenue of about $28.0 billion, gross profit of $5.5 billion, and automotive gross margin excluding credits expanding to 18.1% from 16.3% in Q2, while free cash flow turned positive at $1.5 billion and cash/equivalents reached about $45 billion. Its demand story is strengthened by record North American FSD attach rates above 75%, 1.74 million active FSD subscribers, a largest backlog in 4 years, and 2025 global deliveries of nearly 1.64 million vehicles, showing that software adoption is directly reinforcing vehicle sales. The company’s long-term upside also comes from scalable autonomy and energy platforms, including robotaxi operations in four US metropolitan areas, 3.3 million robotaxi miles, 13.7 GWh of energy storage deployment, and continued investment in Optimus and the Semi, all of which expand Tesla’s addressable market and margin potential.

Tesla is facing a fundamentally more uncertain earnings path because management said early high-volume Optimus production has begun, but key issues still need to be addressed and could take until the end of 2027, limiting near-term monetization of its AI ambitions. Capital discipline is also tightening, as 2026 capex guidance was cut to $20 billion from $25 billion, while Q3 was aided by tariff refunds and warranty benefits in Energy even as overall opex came in above expectations. The outlook remains negative because Tesla’s results can be lumpy from delivery timing and manufacturing issues, costs may remain a headwind, and competition, regulatory risk, supply-chain inefficiencies, and cyclical auto demand continue to pressure the business.