Key Takeaways
- Wall Street firms such as Vanguard, State Street, and BlackRock are buying Tesla stock amid the company’s robotaxi rollout
- Institutional share ownership of Tesla stock has steadily increased since the end of 2022
- Tesla’s robotaxi service is expected to expand in 2026, with the potential to clear regulatory hurdles
- The company’s transition to a recurring revenue model, with a focus on high-margin services, is expected to drive growth and boost profitability
- The consensus analyst estimate calls for Tesla’s earnings per share to nearly double over the next two years
Introduction to Tesla’s Robotaxi Rollout
Wall Street firms are betting big on Tesla, with major firms such as Vanguard, State Street, and BlackRock buying more Tesla shares. As Elon Musk, CEO of Tesla, notes, the company’s robotaxi service is a key milestone in its growth strategy. According to data from Fintel.io, institutional share ownership of Tesla stock has steadily increased since the end of 2022. This trend is significant, as it indicates that big money is betting on Tesla’s AI and robotaxi technology. As Musk himself has stated, "Tesla has been operating a small fleet of robotaxis in Austin and San Francisco since the middle of last year." This development has the potential to disrupt the transportation industry and create new revenue streams for the company.
Tesla’s AI Technology
Tesla’s robotaxi service has been operating with a human safety monitor in the vehicle, but the company has recently started offering unsupervised rides in Austin. This move is a significant milestone, as it indicates that Tesla has accumulated enough data to feel confident that its self-driving cars are safe. As the company notes, "Digital insurer Lemonade recently announced it would lower insurance rates for Tesla owners, citing data that Tesla’s full self-driving (FSD) feature reduces accident rates." This development could clear the way for Tesla to obtain regulatory clearance to expand its fleet in 2026. With its AI technology, Tesla is poised to revolutionize the transportation industry and create new opportunities for growth.
Recurring Revenue Model
Wall Street pros are also taking notice of Tesla’s transition to a recurring revenue model. Starting February 14, the company will only offer the FSD add-on for its electric cars via a monthly subscription. As the company plans to increase subscription fees over time as FSD improves, this move signals its focus on high-margin services to drive growth. Recurring revenue and higher margins from ride fees are expected to significantly boost Tesla’s profitability. As John Ballard, a Motley Fool contributor, notes, "The consensus analyst estimate calls for Tesla’s earnings per share to nearly double over the next two years." This trend is significant, as it indicates that Tesla’s stock has the potential to continue growing in value.
Investor Confidence
The fact that big money is betting on Tesla’s AI and robotaxi technology is a significant indicator of investor confidence. As the company continues to hit important milestones in ramping up its robotaxi service, it is likely that more investors will take notice. With its transition to a recurring revenue model and focus on high-margin services, Tesla is poised to drive growth and boost profitability. As Musk himself has stated, "We’re very confident that our robotaxi service will be a game-changer for the transportation industry." With its strong track record of innovation and growth, Tesla is a company to watch in the coming years.
Conclusion
In conclusion, Wall Street firms are betting big on Tesla’s robotaxi rollout, with major firms such as Vanguard, State Street, and BlackRock buying more Tesla shares. The company’s transition to a recurring revenue model, with a focus on high-margin services, is expected to drive growth and boost profitability. With its AI technology and robotaxi service, Tesla is poised to revolutionize the transportation industry and create new opportunities for growth. As the company continues to hit important milestones, it is likely that more investors will take notice, driving up the value of Tesla’s stock. As Ballard notes, "The Motley Fool recommends Lemonade and Tesla," indicating that the company’s stock has the potential to continue growing in value.
https://www.fool.com/investing/2026/01/27/the-ai-stock-wall-street-insiders-are-buying/
