Tesla (NASDAQ:TSLA) stock has halved from its $480 range and has bounced from $220. It has been trading sideways and is now at below $250. It has recently been a magnet for investment enthusiasm and skepticism in equal measure. Investors were very enthusiastic post-election, but that tapered off due to the painful decline in the stock market and boycotts due to Elon’s involvement in DOGE. But now that the stock is at a significant dip, should you buy? Let’s take a look.
Tesla bulls are looking at TSLA stock as an AI stock and are betting on full self-driving and AI+robotics. They’re also looking at a Robotaxi network. Tesla has also slashed its average cost per vehicle from over $38,000 in 2023 to below $35,000 and has the margins to weather EV tax credits being pulled away. In fact, they think sales could bounce back soon as EV competitors could get squeezed out of the market due to tighter market conditions.
I unfortunately belong in the bear camp. The bull case is too optimistic as Tesla has historically failed to meet targets on FSD, and I’m not too optimistic about robotics. Its robots have been controlled remotely at events, and I do not think Optimus humanoid robots will start driving revenue or profits anytime this decade or maybe even the next decade.
The company already doesn’t have much competition in the U.S., so it doesn’t matter much if EV tax incentives squeeze them out. It’ll just weigh in on Tesla’s margins. Plus, Tesla’s Q1 2025 deliveries fell 13% year-over-year to 336,681 vehicles, and European sales cratered 49% in early 2025. China sales plunged 11.5% last month.
My biggest issue here is the valuation. You’re still paying 120 times earnings for a company that has lost a big chunk of its customer base and has declining sales. There’s no exit ramp that will cause a rebound in revenue soon. Wall Street expects revenue of $21.8 billion (down 15% sequentially) and earnings per share of $0.43 for the Q1 report due April 22. Even if it meets these expectations, that’s dismal for a stock trading at such expensive levels.
I’d run for the hills.
