01:52 PM EST, 11/10/2025 (MT Newswires) -- Tesla (TSLA) shareholders' recent approval of Chief Executive Elon Musk's new compensation package worth up to $1 trillion over the next decade removes a "big" overhang, but physical artificial intelligence projects remain uncertain, Truist Securities said in a note Monday.

While the value of Musk's pay package is stunning, it is "strongly aligned" with the interests of equity, as it will be awarded only if the company achieves both a higher market capitalization and a series of operational goals, according to the note.

The brokerage said it continues to view Tesla mainly as a physical-world AI company, rather than a car company. While the bulk of Tesla's earnings come from electric vehicles and its energy business, only 11% of the stock's value is related to EVs and another 11% to the energy business, Truist said.

Physical AI projects, however, are still "quite unproven," with full self-driving technology "not yet working as expected," the robotaxi service expected to remain in park until FSD is fully corrected, and Optimus still in development, the brokerage said.

Truist rated Tesla as hold with a $406 price target.

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