1 Reason Tesla Stock Is Called a
One experienced analyst recently called Tesla the "most undervalued AI name" in the market. Despite strong performance this year, with shares of Tesla (TSLA 3.46%) hitting new all-time highs, there could be even more upside ahead in 2026.
This growth outlook, however, is tied less to electric vehicles and more to what could become one of the largest opportunities in modern history: artificial intelligence.
Tesla’s Unusual Valuation
Tesla is often seen as an electric vehicle company, but its valuation tells a different story. The stock currently trades at nearly 17 times sales, while other EV companies such as Rivian Automotive and Lucid Group trade at just 3 to 7 times sales.
Why Tesla Commands a Premium
- Tesla is a well-established EV manufacturer with global brand strength and access to vast financial resources, supported by its $1.4 trillion market capitalization.
- The EV sector is filled with failures; over 30 startups have collapsed in the past decade.
- Developing, designing, and producing new vehicles can take 10 to 20 years, especially for companies without manufacturing infrastructure.
- Launching a single production model requires billions in capital and ongoing fundraising efforts.
"Most undervalued AI name."
Author’s Summary
Tesla’s high valuation reflects investor belief that artificial intelligence will drive its next era of growth, far beyond its electric vehicle roots.