By Caitlin McCabe
Welcome to the world of capexmaxxing.
That's how a team of analysts led by George Gianarikas at Canaccord Genuity is describing Tesla's big spending plans. The company yesterday said it's planning to pour over $25 billion on capital expenditures this year as it pursues its AI and robotics plans. That's the news investors appear to be fixating on.
Tesla shares are currently down more than 3% in premarket trading. That's despite an update that was otherwise strong.
Chief Elon Musk has been clear about his ambitions to pivot Tesla to focus on autonomous vehicles and humanoid robots, neither of which is currently for sale. That will require vast amounts of spending. The $25 billion figure is a jump from Tesla's previous guidance of $20 billion and a dramatic rise from last year, when the company's capex was $8.5 billion.
Tesla certainly isn't the only big tech company loosening its purse strings in a major way. Microsoft, Amazon, Meta Platforms and Google parent Alphabet spent a combined $410 billion last year, and the AI investment race continues. "Tesla's not alone in this. I think you've seen, in most, if not all, certainly the major technology companies, substantially increasing their capital investments, and we're going to be doing the same," Musk said on yesterday's earnings call.
Yet the future that Musk is envisioning is, well, still in the future, analysts note, and it's going to take a lot of money-and patience from investors-to possibly get there.
"By betting on Tesla, you are looking through the potential for negative free cash flow and essentially asserting that Elon Musk is right about a future defined by AI-driven robots and clean energy," the team at Canaccord Genuity wrote.
That said, the team has a buy rating on the stock and lifted its price target to $450 after Tesla's results. The stock closed yesterday at $387.51.
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(END) Dow Jones Newswires
April 23, 2026 07:40 ET (11:40 GMT)
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