Elon Musk Thinks Tesla Will Be Worth More Than Nvidia. Is It Time to Finally Buy the Stock?

Group 1: Tesla's Current Market Position - Elon Musk claims Tesla could become the most valuable company in the world, potentially exceeding the combined market cap of the next five companies, which currently totals over $10 trillion [1][2] - Tesla's market cap is currently under$900 billion, suggesting a potential increase of around 10 times in price [2] - The automotive business has seen a decline, with Q1 deliveries down 13% year over year to 337,000 and automotive revenue slipping 20% year over year due to significant price cuts [3][4] Group 2: Financial Performance and Challenges - Profit margins have fallen to 7.4% over the last 12 months, leading to a decrease in earnings power [4] - There is no long-term guidance for 2025, and indicators suggest continued sales declines in major markets like China, Europe, and the United States [4] - Tesla's stock trades at a price-to-earnings (P/E) ratio of 150, significantly higher than the typical automotive stock P/E of around 10 [12] Group 3: Future Prospects and Innovations - Musk's optimism is partly based on the potential of the Tesla Optimus Robot, which he believes could generate $10 trillion in revenue by selling 100 million units at$100,000 each [7] - However, the feasibility of producing a functioning humanoid robot remains uncertain, as Tesla has yet to create a working model [8] - Management has made promises regarding the Cybercab and Optimus Bot, but these projects are not yet established businesses [13] Group 4: Investment Sentiment - Investors are beginning to recognize that Tesla's stock has been overvalued, trading below $300 at the beginning of 2021 and currently around$275 [11] - Despite Musk's claims of future valuation increases, the current state of the automotive business and high P/E ratio suggest caution for potential investors [14]