Tesla confirmed its next-generation AI5 chip has taped out, with volume production targeted for 2027. UBS upgraded Tesla to ‘Neutral’ from ‘Sell,’ saying the stock now better balances near-term EV demand risks with long-term upside from robotics and autonomy. Tesla’s “physical AI” strategy is centered on robotaxis, the Optimus humanoid robot, and custom AI chips. Tesla still retained a dominant 54.2% EV market share in Q1, according to recent Cox Automotive estimates. Shares of Tesla, Inc. (TSLA) rose about 1% in premarket trading on Wednesday after CEO Elon Musk confirmed the taping out of its next-gen AI5 chip. TSLA stock ended Tuesday’s session over 3% higher, and added another 1% in extended trading. On Tuesday, UBS upgraded Tesla to ‘Neutral’ from ‘Sell’ while retaining a $352 price target. Musk confirmed on X early Wednesday that Tesla’s AI chip team has successfully taped out its next-generation AI5 processor, which is being manufactured by TSMC and Samsung Electronics, and that the AI6 and Dojo3 are already in development. Musk previously called AI5 the “golden key” to Tesla’s physical AI era, with limited output expected in 2026 and volume production targeted for 2027.