Tesla's (TSLA) narrative has shifted to physical AI leadership, with investors increasingly focused on its ability to bring power capacity to market and accelerate learning cycles for the platform, Oppenheimer said in a note Thursday.

"We anticipate investors will begin looking at capital investments as a leading indicator of Physical AI success," the report said.

The report updated its 2026 and 2027 capital expenditure estimates to $29.4 billion and $30.4 billion, from $26.4 billion and $26.9 billion, respectively, as expectations for data center and semiconductor spending are raised.

These changes are partly offset by a $2.5 billion increase in the value of its SpaceX (SPCX) position, the note added.

The note said its 2026 capex estimate is 25% above market expectations, suggesting an upward trading bias into Q2 results.

Oppenheimer kept its perform rating on Tesla.

Price: 396.10, Change: -0.28, Percent Change: -0.07