Story Stocks^®

Tesla (TSLA) delivered a complex conclusion to calendar 2025, signaling a radical pivot from a traditional EV maker to an AI and robotics powerhouse. While the stock is trading modestly lower following the release, likely due to a massive $20 bln CapEx guide for 2026, the company managed to edge past EPS estimates, a welcome recovery after falling short of expectations last quarter.

• Gross margin reached 20.1% (up 386 bps yr/yr), marking a two-year high despite delivery headwinds.
• Revenue hit $24.9 bln (down 3% yr/yr) as vehicle deliveries declined 16% to 418,227 units.
• Model S and X programs will receive an "honorable discharge" to repurpose factory space for 1 million Optimus robots annually.
• A $2 bln investment in xAI integrates Grok to serve as an "orchestra conductor" for autonomous fleets and robotics.
• Cybercab volume production remains on track for 2026, with an initial production start scheduled for April.
• Energy revenue reached a record $12.8 bln, growing 26.6% yr/yr on strong Megapack and Powerwall demand.

Briefing.com Analyst Insight:

TSLA’s 4Q25 results mark the closing of the "car company" chapter and the beginning of what management calls a "new book". While the $20 bln CapEx commitment and the $2 bln xAI investment may weigh on short-term sentiment, the rebound in gross margins to 20.1% suggests TSLA still possesses the operational efficiency to fund its "amazing abundance" mission. Because TSLA is already valued more like a high-growth AI and technology firm than a traditional automaker, successfully ramping Optimus 3 on AI chips via the proposed TeraFab are no longer just ambitious goals, but essential requirements to justify the company’s current market valuation.  Ultimately, the long-term success of this pivot likely hinges on whether TSLA can successfully internalize the entire AI stack - from the "orchestra conductor" Grok to physical silicon produced domestically - thereby insulating the company against the geopolitical risks that threaten its global peers.