Why Tesla Stock Is Considered Undervalued in AI
One experienced analyst regards Tesla as the "most undervalued AI name." Tesla's shares (TSLA) have surged to record highs in 2025, with even greater growth expected in 2026. This anticipated expansion is largely driven not by car manufacturing but by Tesla's potential in artificial intelligence (AI).
Valuation Compared to Other EV Companies
Tesla is often seen as an electric vehicle (EV) stock, yet its valuation stands out. The shares currently trade at nearly 17 times sales, while competitors like Rivian Automotive and Lucid Group trade between 3 and 7 times sales.
Reasons Behind Tesla’s High Valuation
- Proven EV Manufacturer: Tesla has a strong global reputation and unmatched access to capital with a $1.4 trillion market capitalization.
- Industry Challenges: The EV sector is known for frequent financial failures; over 30 EV startups have collapsed in the past decade.
- High Barriers to Entry: It takes 10 to 20 years to develop a new vehicle, often requiring billions of dollars and existing manufacturing infrastructure.
Tesla's unique position and financial strength separate it from startups, which must repeatedly seek funding to survive.
Building an EV business around a single model demands massive investment and extensive time, making Tesla’s market standing exceptional.
Author's summary: Tesla’s stock valuation reflects its dominant position in EV manufacturing and its emerging potential as an undervalued leader in artificial intelligence growth.