Picture supply: Getty Pictures
Tesla (NASDAQ:TSLA) inventory has a protracted observe file of proving the doubters unsuitable. And there have been loads of these through the years, starting from Charlie Munger to numerous analysts and brief sellers.
However any investor who believed in CEO Elon Musk’s imaginative and prescient for the EV firm has probably made unbelievable returns over the previous decade. On this time, the inventory has skyrocketed greater than 3,000%, making Tesla the eighth-largest firm within the S&P 500 as we speak.
Nevertheless, that’s all previously. The one query I’ve now could be, ought to I spend money on the inventory as we speak?
Innovation machine
Let’s begin with the positives I see right here. First off, there’s Tesla’s relentless innovation, with robotaxis, the Tesla Bot (Optimus), and varied different initiatives happening on the firm.
Musk stated lately that Optimus robots shall be doing family chores, strolling canine, and even finishing up surgical procedure inside the subsequent few years. Whereas we would scoff at that probability, and positively the timeline during which it’d occur, the imaginative and prescient is nonetheless thrilling.
That is definitely not Ford or Peugeot we’re taking a look at right here!
Additionally, Tesla has a thriving power era and storage enterprise that hardly ever will get talked about. In Q3, income right here jumped 44% yr on yr to simply over $3bn. That is scaling independently of the automotive section, and I’m bullish on its long-term international development potential.
In the meantime, after years of missed deadlines, robotaxis are lastly on the highway. Granted, they nonetheless face regulatory hurdles, but it surely’s price noting {that a} Robotaxi iOS app is now obtainable within the US and Canada. Anybody can obtain it to affix the waitlist.
So this robotaxi dream is way nearer to changing into actuality.
What concerning the inventory?
Turning to issues I don’t like, Tesla’s core EV enterprise is struggling. In 2025, it delivered roughly 1.64m automobiles, which represented a 9% drop on the yr earlier than.
Additionally, China’s BYD has turn out to be the world’s prime vendor of EVs. So whereas Tesla is struggling to develop gross sales, rivals are gaining floor, particularly in Europe.
Will robotaxis scale quick sufficient to offset declining EV gross sales? Probably, however I can’t make sure, and this uncertainty worries me.
In the meantime, Musk continues to polarise opinion together with his outspoken on-line presence. Whereas this doesn’t appear to do the share value any hurt — it has doubled in two years — it should nonetheless be hurting EV gross sales.
In any case, politics is tribal and many individuals/potential clients now affiliate the model squarely with Musk.
In response to a examine by economists at Yale College, Tesla misplaced between 1m and 1.26m car gross sales within the US between late 2022 and early 2025 because of Musk’s political activism.
By the primary quarter of 2025, we discovered that Tesla gross sales would have been about 125% larger than they have been with out the Musk partisan impact.
Yale College
Lastly, we have now the valuation, with Tesla inventory buying and selling at 193 occasions ahead earnings. As I see it, this valuation assumes it’s recreation, set, and match for Tesla’s robotaxis enterprise.
In actuality although, it’s going to face an growing quantity of competitors worldwide, together with from Nvidia not directly (it’s arming carmakers with an open-source autonomous driving platform).
Placing all this collectively, I’m not eager to spend money on Tesla inventory as we speak. I see higher tech alternatives elsewhere.
