Why Tesla Stock Is Considered Highly Undervalued in AI
A veteran analyst describes Tesla as the "most undervalued AI name." While Tesla (TSLA) shares have surged to record highs in 2025, even greater growth is expected in 2026. This outlook is less about car manufacturing and more about Tesla's potential in artificial intelligence (AI), which could become the biggest growth opportunity ever.
Tesla’s Unique Market Position
Typically seen as an electric vehicle (EV) company, Tesla’s valuation tells a different story. Its shares trade at nearly 17 times sales, whereas EV competitors like Rivian Automotive and Lucid Group trade between 3 and 7 times sales.
Key Reasons for Tesla’s Valuation Premium
- Proven Track Record: Tesla is an established EV maker with strong global brand recognition.
- Financial Strength: Tesla’s $1.4 trillion market capitalization gives it exceptional access to capital.
- Industry Challenges: The EV sector has seen at least 30 startups fail over the past decade due to high costs and long production timelines.
- Capital Intensive: Launching a single EV model typically requires billions of dollars and years of development, creating significant barriers for new entrants without manufacturing infrastructure.
One veteran analyst believes Tesla is the "most undervalued AI name."
Tesla’s competitive edge lies in its ability to access funding consistently and maintain leadership during a time when many EV startups struggle financially and operationally.
Author’s Summary
Tesla’s stock value reflects not just its EV dominance but also its leading position in AI, supported by unmatched financial strength and industry credibility.