<p>Despite bouncing back from its rough start to the year to end 2025 on a high note -- and with a gain -- analysts aren't expecting a repeat performance from <strong>Tesla</strong> <span class="ticker-mention inline-flex items-center font-bold">(TSLA <span class="ml-1 text-red-900">3.76%</span>)</span> in 2026. As of the latest look, the analyst community's current 12-month consensus price target for Tesla stock is only $421.48 per share, which is below the ticker's present price near $430.</p>
<p>The thing is, given the sweeping transformation now underway at the company, Wall Street may be right to be cautious.</p>
<div><img alt="A person looks into the distance using a pair of binoculars." width="880" height="587" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NTMyOTAvbWFuLWxvb2tpbmctaW4tdGhlLWRpc3RhbmNlLXdpdGgtYS1wYWlyLW9mLWJpbm9jdWxhcnMuanBnJnc9Mzg0MA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NTMyOTAvbWFuLWxvb2tpbmctaW4tdGhlLWRpc3RhbmNlLXdpdGgtYS1wYWlyLW9mLWJpbm9jdWxhcnMuanBnJnc9Mzg0MA"/>
<p>Image source: Getty Images.</p>
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<h2>Ch-ch-ch-ch-changes at Tesla</h2>
<p>You know Tesla as one of several manufacturers of electric vehicles (EVs). But that's far from its sole identity. Its EV business almost seems somewhat secondary now, in fact, in light of recent announcements. One of these announcements is news that the company will soon stop making its Model S and Model X vehicles, and focus -- for now anyway -- strictly on production of its Model 3 and Model Y.</p>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Tesla Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1RTTEEucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1RTTEEucG5nJnc9MTI4"/></div><div><h2>NASDAQ: TSLA</h2><div>Tesla</div></div></div><div><div><div>Today's Change</div><div>(-3.76%) $-15.85</div><div>Current Price</div><div>$406.11</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$1.4T</div><div>Day's Range</div><div>$399.19 - $423.90</div><div>52wk Range</div><div>$214.25 - $498.83</div><div>Volume</div><div>3.2M</div><div>Avg Vol</div><div>74M</div><div>Gross Margin</div><div>18.03%</div></div></div></div></section>
<p>The idea makes enough practical, superficial sense. The two models to be dropped from its lineup only account for about 3% of Tesla's total production, which makes them more of a distraction than a meaningful profit center. It's worth noting, however, that sales of both higher-end electric vehicles have also deteriorated since other EV makers like <strong>BYD</strong>, <strong>Geely Automobile</strong>, and <strong>Volkswagen</strong> have stepped up their EV output; that's particularly true in China.</p><div><div id="foolcom_sidebar_top_container"></div></div>
<p>The other somewhat shocking recent development is something else Tesla CEO Elon Musk said last month in conjunction with the decision to discontinue the Model S and Model X battery-powered automobiles. That is, the company is largely dropping these two high-priced EVs from its portfolio so it can focus on the development and production of an AI-powered humanoid robot called Optimus that's expected to be made available to the public sometime next year. Musk even went as far as to suggest these $30,000 automatons could prove to be &#34;the biggest product of all time.&#34; </p><div><div><div><div></div></div></div></div>
<p>These moves are, of course, all just part of a bigger philosophical shift away from electric vehicles and toward artificial intelligence (AI)-powered automation, including autonomously driven transportation.</p><div><div id="in_line_article_pitch_container"></div></div>
<p>The kicker: Whispers are now circulating that Musk is toying with the idea of melding separately managed SpaceX with his also-separately run artificial intelligence developer xAI, as well as the possibility of melding these two organizations with Tesla itself.</p>
<h2>On hold 'til further notice</h2>
<p>None of these is necessarily a bad idea. All of these ideas, however, are either lengthy overhaul projects, distracting, or both. Tesla's core electric vehicle business itself is positioned to suffer the most in the meantime as Musk focuses his attention on reshaping the rest his empire while also refocusing Tesla. Moreover, not only is it not clear when all of this work might actually be done, but there's also no clarity as to whether it will be fiscally worth it when it's all completed.</p>
<p>That's a problem for Tesla stock simply because investors dislike unknowns and uncertainty, and will likely remain on the sidelines until clarity reemerges. You might want to do the same.</p><div id="article_pitch_container"></div><div id="promobox_container"></div>

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<p>Wall Street analysts are cautious about Tesla's (TSLA) performance in 2026, with a 12-month price target of $421.48, below its current price of around $430. Tesla plans to discontinue its Model S and Model X to focus on the Model 3, Model Y, and the development of an AI-powered robot, Optimus. This shift may distract from its core EV business, leading to uncertainty among investors. As a result, Tesla's stock may face challenges until more clarity emerges regarding its future direction.</p>

- Analysts anticipate a challenging year for Tesla in 2026, projecting a 12-month price target of $421.48, below its current price of $430.  
- Tesla is shifting focus from electric vehicles, discontinuing the Model S and Model X to concentrate on the Model 3 and Model Y, while exploring the development of AI-powered robots.  
- This broader transformation may detract from its core EV business, creating uncertainty that could impact investor confidence and stock performance.

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What Wall Street Thinks Tesla Will Be Worth by End of 2026. 1 Reason It Might Be Right