For much of its history, Tesla (TSLA 2.28%) was known for its lineup of electric vehicles (EV) and energy storage products. But over the last several years, CEO Elon Musk has been sharing his vision to transform the company from a pioneer of the sustainable energy movement into a technology-enabled services business driven by artificial intelligence (AI).
At the forefront of this mission is Tesla's humanoid robot, Optimus. Musk is so serious about Optimus' potential that he's made the executive decision to scale down production of the models S and X vehicles and repurpose Tesla's Fremont factory into a manufacturing center for Optimus.
Let's explore what's at stake with Optimus in 2026. With Tesla essentially mortgaging its future on next-generation services, is now the time to buy the stock before AI fuels its next parabolic run?
NASDAQ: TSLA
Key Data Points
What can Tesla Optimus do?
Tesla has been building, testing, and iterating Optimus for many years. In its current form, the humanoid is known as Optimus Gen 3.
In marketing videos, Tesla claims that Optimus has learned fine motor skills given its ability to handle delicate objects such as tearing paper towels, opening a cabinet, or folding laundry.
In addition, Tesla has published videos of Optimus demonstrating advanced dexterity -- with an ability to catch moving objects tossed in its general direction, as well as learning how to walk on uneven terrain.
Image source: Tesla.
When will Tesla Optimus be available?
During Tesla's fourth-quarter earnings call, Musk said that his long-term goal is to produce 1 million Optimus bots per year at the Fremont factory.
With that said, Musk tempered expectations by telling investors that even with Optimus' advances, the humanoid remains in a research and development (R&D) phase. Besides the lab, Optimus is only deployed within Tesla's own factories so that it can watch, observe, and learn how to complete basic tasks.
Musk hinted that production of Optimus won't occur until "probably the end of this year."
Is Tesla's valuation justified?
As of this writing (Feb. 18), Tesla boasts a market capitalization of $1.6 trillion. From a valuation perspective, the company trades at a forward price-to-earnings (P/E) multiple of 202. Using Wall Street's consensus earnings per share (EPS) estimate of $4.05 for 2028, Tesla still trades at 103 times its projected earnings two years from now.
It's easy to say that Tesla stock is already priced to perfection and that buying shares today requires paying a premium. But a contrarian might say Tesla stock is undervalued because no company in history has ever successfully deployed physical AI at a global scale.
In other words, since there's nothing to benchmark Optimus against, it's impossible to know how big Tesla's robotics business could truly become.
Optimus remains an extremely asymmetric bet. If Tesla executes on this vision, the stock could soar to new highs rather easily. But if the product flops or struggles to scale, then Tesla stock could be due for a meaningful de-rating.
Against this backdrop, I would not buy Tesla stock today purely on the hype that Optimus will transform the company by the end of the year. In reality, it will take years -- or even decades -- before Optimus adds additional trillions of value to Tesla in the long run.
