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Tesla stock has climbed about 26% over the past month, with shares trading at about $445 as of this writing. A key driver has been renewed enthusiasm around Tesla’s Robotaxi plans, as bulls argue the company’s autonomous ride-sharing network is gaining traction.
Tesla’s autonomous ride-sharing service has been steadily expanding. The service primarily uses Model Y vehicles and launched in Austin in mid-2025. It has since expanded to Dallas and Houston, with preparations underway in Phoenix, Miami, Orlando, Tampa, and Las Vegas in the first half of 2026.
In its first-quarter 2026 update, Tesla said its paid Robotaxi miles nearly doubled sequentially, indicating activity is increasing even though the service remains a small part of the overall business.
Long-term forecasts remain large. Goldman Sachs Research estimated the global Robotaxi market could reach roughly $415 billion by 2035, with cumulative gross profits across the industry potentially totaling about $440 billion over the next decade. The opportunity would likely be shared among Tesla, Alphabet’s Waymo, Amazon’s Zoox, and Chinese competitors.
However, Tesla’s financial impact may take time. On the first-quarter earnings call, CEO Elon Musk said he does not expect unsupervised Full Self-Driving or Robotaxi revenue to be “super material” this year, but that it will be material “in a significant way next year.” That framing suggests the most optimistic part of the Robotaxi bull case is largely a 2027 story.
Despite the Robotaxi narrative, Tesla’s valuation appears stretched. At about $1.7 trillion, Tesla’s market capitalization sits above trailing 12-month revenue of roughly $98 billion and trailing net income of about $3.9 billion. That implies a price-to-earnings ratio of more than 400 and a price-to-sales ratio close to 16—multiples that are difficult to reconcile with recent profitability.
Tesla’s operating results show a business in transition. First-quarter revenue rose 16% year over year to $22.4 billion, but the operating margin came in below the 5.7% reported in the fourth quarter of 2025. In the first quarter, the operating margin was 4.2%.
Spending plans may be a bigger issue in the near term. Chief financial officer Vaibhav Taneja said on the first-quarter earnings call that 2026 capital expenditures are now expected to top $25 billion—about $5 billion above prior plans and roughly three times the $8.6 billion Tesla spent in 2025.
Taneja also said free cash flow would be negative for the remaining three quarters of the year as Tesla funds multiple projects, including AI compute, its in-house AI5 inference chip, the Cybercab and Megapack 3 production ramps, and Optimus (a humanoid robot).
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