12:21 PM EDT, 10/29/2025 (MT Newswires) -- Tesla (TSLA) is the market leader in physical artificial intelligence with technologies like full self-driving, Robotaxi and Optimus, but the company faces challenges in the near term, BofA Global Research said in a note Tuesday.

The firm said Q3 results saw consolidated revenue rise to $28.1 billion and vehicle deliveries top expectations at about 497,000 units.

BofA highlighted the energy business as a bright spot but noted the company's current valuation levels are stretched.

Energy revenue and margins performed above analyst expectations with storage deployments up 81% year-over-year and energy business gross margin rising to 31.4%.

The note also flagged Robotaxi progress with expanded service in Austin and plans to launch in 8 to 10 metro areas by the end of 2025.

BofA reiterated a neutral rating and raised its price target to $471 from $341.

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