Is TSLA a good stock to buy? We came across a bullish thesis on Tesla, Inc. on Eric Ding’s Substack. In this article, we will summarize the bulls’ thesis on TSLA. Tesla, Inc.’s share was trading at $373.72 as of April 23rd. TSLA’s trailing and forward P/E were 358.81 and 185.19 respectively according to Yahoo Finance.
Tesla, Inc. designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems in the United States, China, and internationally. TSLA reported mixed Q4 2025 results, broadly in line with expectations, but the key takeaway for investors was its accelerating pivot toward an AI-driven and autonomy-led business model.
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While Q4 revenue of US$25B declined modestly year over year and EPS softened to US$0.24, full-year net income of US$3.8B and EPS of US$1.07 underscored resilient underlying profitability despite transitional pressures. The results reflect a business deliberately moving through a capital-intensive phase rather than one in steady-state maturity.
The most important development was Tesla’s guidance for more than US$20B of capital expenditures in 2026, marking the start of a multi-year investment cycle focused on AI infrastructure, energy systems, and advanced manufacturing. This includes potential domestic AI chip fabrication and expanded packaging capabilities, alongside a rapid scale-up in training compute toward 250–300k H100e-equivalent GPUs.
At the same time, Tesla is actively shifting away from legacy EV lines, retiring Model S and Model X production and reallocating capacity toward Optimus humanoid robots, Cybercab, and Tesla Semi, reinforcing its transition into an AI-first industrial platform.
Despite elevated investment requirements and short-term earnings volatility, Tesla maintains a strong balance sheet with US$36B in net cash, providing flexibility to fund this transformation cycle. Valuation work implies a DCF fair value of US$460 per share and a target cost basis of US$300, reflecting a 35% margin of safety and a higher 12.5% cost of equity assumption.
The autonomous segment is estimated to represent roughly 96% of Tesla’s market capitalization, embedding expectations of sustained ~55% growth in autonomous cash flows. Forecasts suggest EPS rising to US$3.90 by 2028, supported by scaling autonomy revenues and improving margins. While uncertainty remains elevated, Tesla’s positioning across AI, robotics, and compute infrastructure continues to support a structurally bullish long-term outlook.
Previously, we covered a bullish thesis on Tesla, Inc. (TSLA) by Oliver MMMT Wealth in April 2025, highlighting EV slowdown, margin compression, weak deliveries and pivot toward autonomy, AI, robotics and energy. TSLA’s stock price has appreciated by 60.19% since our coverage. Eric Ding shares a similar view but emphasizes on AI-driven capex cycle, autonomy-led valuation upside and compute expansion.
Tesla, Inc. is on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 137 hedge fund portfolios held TSLA at the end of the fourth quarter which was 120 in the previous quarter. While we acknowledge the risk and potential of TSLA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSLA and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
