Musk paints a grand vision of AI and Siasun Robot&Automation, but Goldman Sachs Group, Inc. isn't buying it: Robotaxi and "Optimus" can't yet support the grand narrative of Tesla, Inc. (TSLA.US)

Title context: Musk paints a grand vision of AI and Siasun Robot&Automation, but Goldman Sachs Group, Inc. isn't buying it: Robotaxi and "Optimus" can't yet support the grand narrative of Tesla, Inc. (TSLA.US) Text: The latest earnings data report and earnings conference call of Tesla, Inc. (TSLA.US), the U.S. giant of artificial intelligence, humanoid Siasun Robot&Automation, autonomous driving technology and electric vehicle manufacturing, comprehensively show that this tech giant is striving to further transform its AI supercomputing system and fully autonomous driving capabilities, as well as the world's most cutting-edge "AI + industrial" Siasun Robot&Automation process, into increasingly strong paid prospects on both the B2B and B2C sides. However, Wall Street financial giant Goldman Sachs Group, Inc. clearly does not yet believe that these positive developments, nor the grand AI, Robotaxi (fully autonomous taxi) and Siasun Robot&Automation pie painted by CEO Musk, are enough to support global capital rushing into Tesla, Inc. shares. Tesla, Inc.'s financial report data shows that third-quarter total revenue was approximately $28.046 billion, basically flat year over year and below the roughly $28.13 billion consensus estimate of Wall Street analysts; the company's adjusted earnings per share were $0.48, above the market expectation of $0.45; automotive gross margin excluding regulatory credits recovered to 18.1%, while free cash flow accelerated its repair to turn positive, reaching approximately $1.531 billion. Tesla, Inc.'s Q3 operating profit was nearly 20% higher than analysts' consensus estimate, and the quarterly gross margin was 19.6%, a better-than-expected sequential recovery and nearly 2 percentage points above market expectations. Tesla, Inc. also lowered its annual capital expenditure target from more than $25 billion to $20 billion. On the earnings conference call, Musk said Tesla, Inc.'s goal is to achieve annual production of about 5 million vehicles around 2030he stressed that the FSD (Full Self-Driving) software system is currently the most core factor driving demand. In terms of specific business structure, automotive business revenue was $20.56 billion. Although its year-over-year growth rate turned from positive to negative, it was nearly 4% above analysts' consensus estimate, which also means the decline in Tesla, Inc.'s automotive business revenue was not as severe as analysts expected; service and other revenue growth slowed to 33% year over year, but was more than 7% above expectations; while energy generation and storage revenue fell 16% year over year, returning to negative growth, and was more than 26% below analysts' consensus estimate, making it the main drag that caused third-quarter revenue to miss expectations. At the same time, the substantial growth in paying users of Tesla, Inc.'s FSD fully autonomous driving subscription software driven by its AI supercomputing system, the expansion of Robotaxi autonomous driving mileage, and Optimus (i.e., the "Optimus" humanoid Siasun Robot&Automation) entering early productionwith plans to deliver Optimus to companies other than Tesla, Inc. around the end of next year, with the first high-value scenarios being all-weather heavy industry and dangerous repetitive workthese latest developments have jointly strengthened Tesla, Inc.'s Physical AI narrative. Under Musk's leadership, Tesla, Inc. is accelerating the simultaneous advancement of FSD technology upgrades, official regulatory approval and market access for FSD and Robotaxi in Europe, breakthrough automotive software monetization, and the acceleration of Cybercab fully driverless taxis (i.e., Robotaxi) and humanoid Siasun Robot&Automation into mass production, in order to accelerate the realization of the "Physical AI super grand blueprint" Musk has drawn for Tesla, Inc.'s growth prospects. According to the view of NVIDIA Corporation CEO Jensen Huang, "Physical AI" emphasizes enabling Siasun Robot&Automation/automotive autonomous operating systems to perceive, reason and complete a full set of actions in the real world, and an era in which "Physical AI" assists the evolution of human civilization is approaching. "Physical AI" emphasizes enabling Siasun Robot&Automation/autonomous systems to perceive, reason and complete a full set of actions in the real world, and these three types of capabilities are precisely the key AI toolchain that advances AI large language models from "only being able to converse" to "being able to work in the physical world." Goldman Sachs Group, Inc. explicitly stated that its preliminary assessment of the financial report was positive, yet it still maintained the cautious Neutral rating and kept its 12-month target price at only $360: relative to the October 20 closing price of $373.71 used in the report, this implies about 3.7% downside. Goldman Sachs Group, Inc.'s overall stance on Tesla, Inc. can be summarized as: acknowledging progress in AI and Siasun Robot&Automation-related businesses, but not yet seeing sufficiently strong valuation appeal and real cash flow creation prospects. The stock market reaction also reflected this sharp divergence: after the share price rose 3.41% on October 21 to close at $386.47, it reversed from a gain of about 2% to a decline of about 2% in after-hours trading; recalculated based on that day's closing price, Goldman Sachs Group, Inc.'s target price implies about 6.85% downside. As of the pre-market trading session for U.S. stocks on Thursday, Tesla, Inc.'s share price had fallen more than 5% to around $366. Gross margin recovers first, while AI investment is still reshaping the income statement The most substantive improvement in Tesla, Inc.'s Q3 performance report was on the gross margin side, while the realization of operating profit still lagged a step behind. Overall gross margin was 19.6%, above Goldman Sachs Group, Inc.'s forecast of 18.5% and the FactSet consensus estimate of 17.5%; automotive gross margin of 18.1% also exceeded both of their 16.3% and 16.8%. But operating profit was only $718 million, below Goldman Sachs Group, Inc.'s expectation of $1.043 billion and FactSet's $1.473 billion, and basically in line with the company-compiled consensus estimate of $721 million, indicating clear differences between different expectation bases. Lower regulatory credit revenue, as well as increased R&D, computing power depreciation and new product launch costs, weakened the transmission of gross margin improvement to operating profit. Particularly noteworthy is that adjusted EPS excluding stock-based compensation (SBC) was $0.48, exceeding Goldman Sachs Group, Inc.'s expectation; adjusted EPS including SBC was only $0.20, below its forecast of $0.24. Goldman Sachs Group, Inc.'s $360 target price uses a valuation basis of 150x the sum of forward EPS for the fifth to eighth quarters, including SBC. Cash flow improvement enhanced investment capacity, but energy demand still needs to be judged layer by layer against current revenue and profit. Energy revenue was $2.881 billion, about 23% below Goldman Sachs Group, Inc.'s forecast, despite energy storage deployments reaching 13.7GWh, a record order backlog, and the Texas Megafactory having begun production. The conference call further disclosed that energy gross margin rose to 33.1%, mainly supported by tariff refunds and warranty provision adjustments; Megapack capacity for 2027 is nearly sold out, reflecting subsequent demand. On cash flow and capital expenditure data, quarterly capital expenditure was $4.732 billion, significantly below Goldman Sachs Group, Inc.'s estimate of $8 billion, helping the company achieve positive free cash flow, with cash and investments of about $45.4 billion. Goldman Sachs Group, Inc.'s report was published before the conference call, after which management lowered the full-year capital expenditure forecast from more than $25 billion to about $20 billion, while obtaining a borrowing facility of up to $30 billion. The latest investment implication regarding cash flow and capital expenditure is that Tesla, Inc.'s short-term funding pressure has been significantly alleviated, but future cash returns still depend on the commercialization efficiency of new capacity and AI businesses. FSD begins to deliver, but the revenue trajectory of Robotaxi and "Optimus" cannot yet support Tesla, Inc.'s high valuation FSD has already formed observable paid growth, while Robotaxi is validating scaled operations. Goldman Sachs Group, Inc. noted that active FSD paying users reached 1.74 million, up about 18% quarter over quarter and about 67% year over year; FSD adoption in North American new vehicle deliveries exceeded 75%, up from more than 55% in the previous quarter, and more market access progress was made in Europe. However, Goldman Sachs Group, Inc.'s analyst team noted that this latest user metric includes one-time purchases and subscriptions and cannot all be treated as monthly subscription revenue. Goldman Sachs Group, Inc.'s research report recorded that as of October 18, cumulative paid, fully driverless Robotaxi miles reached 3.1 million, up from 1 million on September 3; Cybercab, this Robotaxi product line, has expanded its operating coverage in Austin, with the list of subsequent cities continuing to expand. The conference call proposed striving to have the first customer vehicles join the Robotaxi network under a geofencing and fleet management framework in the second quarter of 2027. Goldman Sachs Group, Inc. stressed that the key to Tesla, Inc.'s commercial value expanding further beyond expectations is converting autonomous driving capability into higher vehicle utilization and lower cost per paid mile; management confirmed that the target cost of $0.30 has not yet been achievedthat is, the Robotaxi business has not yet achieved the target cost of $0.30 per mile; Musk expects the business to "attract attention" starting in the second quarter of next year and to become an "important contribution" in the third and fourth quarters of next year. Optimus's valuation potential comes from replicable labor capability, and it is still in a stage of joint ramp-up in engineering and manufacturing. Goldman Sachs Group, Inc. confirmed that Optimus has started production on the Fremont line, but hardware and manufacturing processes are still being iterated; the conference call further pointed to delivery to external enterprise customers around the end of 2027, with plans to integrate the AI5 chip around April 2027. Tesla, Inc. management, including Musk, also plans to increase computing power from about 265MW to 400MW by year-end, advance construction of the Austin wafer fab and equipment commissioning in 2027, and expand Semi, energy storage and battery materials capacity to ease supply constraints. The appendix to Goldman Sachs Group, Inc.'s latest research report on Tesla, Inc.'s performance still forecasts revenue of about $127.3 billion and $145.1 billion in 2027 and 2028, respectively, with EPS of $1.75 and $2.45, indicating that its model itself already incorporates a stronger AI-driven growth trajectory. But Goldman Sachs Group, Inc.'s analysts stressed that what truly determines whether the valuation can be further revised upward is whether FSD, Robotaxi and Siasun Robot&Automation can contribute incremental profit earlier and on a larger scale than current market consensus forecasts; the report also explicitly lists these developments as upside factors. Wall Street divergence is becoming more intense: who is willing to pay the "Physical AI premium" in advance? Updates to Wall Street institutional ratings and target prices after Tesla, Inc.'s financial report and earnings call show that well-known investment institution Piper Sandler raised its target price from $450 to $475, maintaining an Overweight rating, believing that key P&L drivers have improved significantly, and is especially optimistic about the rapid expansion of FSD adoption and Robotaxi fleet size based on Tesla, Inc.'s exclusive AI supercomputing system; based on the October 21 closing price, Piper Sandler sees potential upside of about 22.91% for Tesla, Inc. over the next 12 months. UBS Group AG raised its target price from $391 to $425, maintained a Neutral rating, implying about 9.97% upside, and significantly raised its 2027 and 2028 EPS forecasts to $2.02 and $3.17, based on support for margins from FSD and the energy business; however, it expects Robotaxi to make a significant financial contribution only by late 2027 or 2028. The significant differences between the calculations of Piper Sandler and UBS Group AG analyst teams and those of Goldman Sachs Group, Inc. can be said to be concentrated in disagreements over the speed of profit realization, pace of growth and degree of valuation contribution of FSD, Robotaxi and Siasun Robot&Automation. Derived from technical and commercial mechanisms, FSD, Robotaxi and Optimus correspond to three different monetization stages: FSD generates revenue through existing vehicles and paid features; Robotaxi further turns driving capability into a continuously provided mobility service; and Optimus must transform perception, decision-making and action execution into reliable productive labor. Vehicle data and software can support Robotaxi expansion, but Siasun Robot&Automation must also accumulate its own operating experience and solve issues of hand dexterity, contact control and durability; the driving data advantage cannot be directly equated with Siasun Robot&Automation capability. Therefore, for investors focused on Tesla, Inc.'s fundamental growth prospects and the "Musk faith-based investment theme," the three core pieces of evidence that need to be closely tracked and observed over the medium and long term are: progress in FSD paid retention, the unit economics of Robotaxi, and the reliable operation of Optimus in real tasks and the actual input and output returns of large enterprise customers. Only continued improvement in these indicators can accelerate the prospects of the most cutting-edge AI agents and Siasun Robot&Automation into Tesla, Inc.'s profit forecasts.