Deep Research

Tesla (TSLA)

4 min read

Snapshot

  • Ticker: TSLA (NASDAQ)
  • Bucket: Consumer, Fintech & Housing
  • Q1 2026 position: $74.6M — 200,795 shares, 1.49% of 13F
  • HQ: Austin, Texas
  • Business: EVs, energy storage (Megapack), and — increasingly the valuation story — autonomy (FSD/robotaxi) and humanoid robotics (Optimus).

Business Overview

Tesla’s 2025 was a transition year: roughly 22.5B, and 22.4B (+16% YoY, slightly below consensus), operating income up 136%, and automotive gross margin ex-regulatory-credits of 19.2% versus 12.5% a year earlier — though management flagged non-recurring tariff-related benefits in that figure.

The strategic pivot is explicit. Unsupervised robotaxi service expanded from Austin to Dallas and Houston in April 2026 with paid miles nearly doubling sequentially, though management confirmed robotaxi revenue will not be material in 2026. On Optimus, Tesla said it will begin converting Fremont’s Model S/X lines into its first large-scale Optimus factory in Q2 2026, with a second-generation line at Giga Texas designed for long-term capacity of 10 million robots per year. Full-year 2026 capex guidance was raised to over 20B) for AI compute (AI5 chip taped out), Optimus factories, Cybercab, and Megapack — Tesla is now spending like an AI-infrastructure company, and free cash flow turned negative in Q1 2026 as a result.

Financial Trajectory

PeriodRevenueNotes
Q1 2025$19.3BAuto GM ex-credits ~12.5%; delivery slump
Q2 2025$22.5B—
Q3 2025$28.1BRecord deliveries (~497k) on US EV-credit pull-forward
Q1 2026$22.4B (+16%)Op income +136%; auto GM ex-credits 19.2% (tariff one-timers); FCF negative on >$25B capex plan

Why Atreides Owns It

Tesla is one of Baker’s longest-running relationships with any stock — he was an early institutional Tesla bull during his Fidelity OTC years — and the Atreides position has been held through all six quarters, traded around a core ~200k shares. The thesis today is not cars: it is that Tesla is an embodied-AI company where autonomy (robotaxi) and robotics (Optimus) are the real assets, consistent with Baker’s view that AI value accrues to those who own the scarce physical complements — power, silicon, and now actuators and training fleets.

Baker is unusually governance-active here. Ahead of the November 2025 vote he publicly announced Atreides would vote FOR Musk’s ~$1T performance-based compensation package, arguing that “shareholders should generally support thoughtfully structured performance-based CEO compensation packages because they incentivize CEOs to create transformational growth and value,” and warning that “Tesla’s stock would decline significantly should Elon leave and even more should the Optimus team leave with him.” That framing is the position in miniature: the key-man and the Optimus team are the asset; the comp package was insurance on retaining them. The ~1.5% sizing, however, signals measured conviction — exposure to the embodied-AI option without betting the fund on execution timelines Musk himself routinely misses.

Position History

QuarterTypeShares/NotionalValue% of 13F
Q4 2024Common308,695$124,663,3892.73%
Q1 2025Common195,542$50,676,6651.54%
Q2 2025Common321,897$102,253,8012.84%
Q3 2025Common206,562$91,862,2531.79%
Q4 2025Common186,035$83,663,6601.02%
Q1 2026Common200,795$74,645,5411.49%

Held continuously but actively traded: the share count has oscillated between ~186k and ~322k, with cuts into weakness (Q1 2025) and a rebuild (Q2 2025) followed by gradual trimming. The pattern reads as a permanent core stake of roughly 200k shares with a tactical sleeve traded around quarterly volatility — notably, the fund did not add size around the comp-package vote it publicly championed.

Risks

  • Key-man risk is the thesis: Baker’s own words concede the stock falls “significantly” if Musk leaves — and litigation over the comp package or Musk’s attention across xAI/SpaceX/politics keeps that tail live.
  • Robotaxi and Optimus timelines: robotaxi revenue immaterial in 2026 by management’s own admission; Optimus factories are being built before the product has proven commercial use — >$25B of capex against unproven demand.
  • Core auto business faces Chinese EV competition (BYD), an aging lineup, and the loss of US EV credits; Q1 2026 margin strength included non-recurring tariff benefits.
  • Valuation embeds the embodied-AI option; any autonomy stumble (accident, regulatory halt in Texas/elsewhere) compresses the multiple violently.
  • Negative free cash flow during the capex ramp removes the downside cushion profitability had provided.
  • Governance: a board and shareholder base aligned around one individual cuts both ways for minority holders like Atreides.

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