03:30 PM EST, 11/10/2025 (MT Newswires) -- Tesla's (TSLA) retention of Chief Executive Elon Musk has helped remove a major "overhang" on the electric vehicle maker's stock, but its physical artificial intelligence projects still face uncertainty, Truist Securities said Monday.

Last week, Tesla shareholders approved Musk's roughly $1 trillion compensation plan. The package includes a potential award of about 423.7 million Tesla shares, to be granted in 12 tranches. Tesla Chair Robyn Denholm had called on shareholders to vote in favor of the pay plan, or risk losing Musk from the company.

"Despite the nominally high price tag, we see retaining Musk as imperative for the company's success, and view the dilution as so well-aligned with equity holder interests, that we view the vote primarily as a removal of an overhang," Truist analysts, including William Stein, said in a Monday note to clients.

Tesla shares were up 3.8% in Monday late-afternoon trade. The stock has gained 10% so far this year.

Truist identified three major AI projects of substantial value at Tesla, namely Full Self-Driving, or FSD, the robotaxi service, and the Optimus humanoid automaton. "While we ascribe a significant value to these projects, none of them are certain enough to justify a more optimistic view on the shares," the analysts wrote.

The brokerage kept its hold rating and a $406 price target on the Tesla stock.

The FSD business is generating modest revenue and still doesn't work as planned, according to Truist. "Nevertheless, we recognize ongoing improvements and the potential for this technology to work in the real world sometime in the next year or two."

FSD is a driver assistance software offered by the EV maker.

The robotaxi service is still in early stages and is likely to "remain in park as long as FSD is not working flawlessly," the analysts said. "Once FSD is fully corrected, we expect this business can scale significantly."

Optimus is still in development, according to the note. "While it's a zero today, if we expect this will eventually be a general purpose robot combining human-like dexterity with super-human intelligence, it's quite easy to adopt a view that Optimus could sell millions per year for ($30,000) each," the analysts wrote.

Last month, the company's third-quarter earnings fell more than expected, though record deliveries helped propel its revenue above Wall Street's estimates.

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