"Don't short Musk" becomes a Wall Street catchphrase? AI and robotics narratives heat up, Tesla (TSLA.US) short sellers retreat, and hold ratings surge

According to news from Zhihui Finance APP, Tesla (TSLA.US) stock saw a significant drop in 2026, but Wall Street analysts are increasingly reluctant to advise investors to sell the stock.

Compiled data shows that out of 61 analysts covering Tesla, only 13.1% currently give it a “sell” rating. This is the lowest proportion since April 2023, when concerns about profit margins dragged down its valuation and 12.8% of analysts recommended selling. In January this year, the proportion of “sell” ratings reached a 2026 high of 23.3%.

The ebbing of bearish sentiment comes as CEO Elon Musk attempts to transform Tesla from an automaker into a physical artificial intelligence (AI) giant, shifting focus from electric vehicles to self-driving taxis and humanoid robots.

“There is now a ‘don’t short Musk’ sentiment in the market,” said Max Gokhman, Senior Vice President at Franklin Templeton Investment Solutions. “It has been proven that even with repeated delays, his grand visions still have a chance to materialize. For analysts, adopting a neutral stance is better than making a wrong call.”

Franklin Templeton holds Tesla stock.

However, a decrease in skepticism does not necessarily indicate growing optimism. The latest “sell” rating for Tesla disappeared not because an analyst upgraded the stock, but because long-time bear Colin Langan left Wells Fargo. After Langan’s departure, the bank suspended coverage of Tesla and 17 other automakers.

Meanwhile, the proportion of “hold” equivalent ratings for Tesla has risen to its highest level in more than two years. Tesla shares are down 21% this year, while the S&P 500 Index has risen 12% over the same period.

Among major technology giants, Tesla still stands out as an exception. Within the “Magnificent Seven” U.S. stocks, negative analyst ratings for five companies account for less than 2%, while bearish analyst coverage for Apple (AAPL.US) stands at just 10.7%.

Evan Feinseth of Tigress Financial Partners noted that analysts covering Tesla “are increasingly realizing that the company may have significant option value in self-driving, robotics, and AI, making it inappropriate to value Tesla like a traditional automaker. But this also raises the execution bar: the higher the valuations assigned to these future businesses, the more Tesla needs to prove they can generate meaningful revenue, profit margins, and returns.”

Tesla’s performance in delivering on such grand ambitions has been uneven. Critics have long accused Musk and Tesla of overpromising and failing to deliver on time, while Wall Street continues to wait for autonomous driving technology and the Optimus robot to become significant profit drivers.

In recent weeks, the company’s Cybercab debut failed to live up to investor expectations and triggered a federal investigation into whether it meets safety standards.

Nevertheless, Musk has already achieved ambitions that once seemed out of reach, and his supporters believe he can do it again. Many Musk enthusiasts also hope he will merge Tesla with SpaceX (SPCX.US), his rocket, satellite, and artificial intelligence company.

“The overall trend in the market toward AI concept stocks remains positive, but investors have become more rational,” said Dirk Mulraky of SLC Management, which holds Tesla stock through index positions. “They demand evidence of revenue potential and are more sober about valuations.” He added, “In contrast, the analyst community remains generally optimistic.”