Truist Securities reiterated a Hold rating and a $406 price target on Tesla Inc. (NASDAQ: TSLA), saying that while the approval of CEO Elon Musk's compensation package removed a key overhang, the company's long-term value still hinged on unproven physical AI initiatives.

The firm noted that the shareholder vote in favor of Musk's equity award alleviated concerns that he might shift his focus to other ventures, such as xAI. However, Truist said Tesla's main growth opportunities—its Full Self-Driving (FSD) system, robotaxi ambitions, and Optimus humanoid robot—remained early-stage, with limited revenue contribution so far.

Analysts described Tesla's FSD progress as “impressive but not yet performing as expected,” adding that despite the excitement around AI-driven innovation, the setup for investors remained challenging. Truist maintained its discounted cash flow-based price target of $406 and reiterated its Hold rating.