Tesla (NASDAQ:TSLA) stock is surging toward the 2025 finish line, a stark contrast with how the year began. The company’s stumbles in the early going now feel like a distant memory, with TSLA’s share price more than doubling in value since hitting a low point in April.
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Much of the company’s rising fortunes rest on Elon Musk and his unmatched talent for keeping Tesla’s long-term vision front and center. From robotaxis to humanoid robots, Musk continues to sell a future that keeps investors leaning in.
In fact, getting both of these initiatives to market is a central pillar of Musk’s unprecedented pay package, which was approved last month by the company’s shareholders. Musk will have to meet some very well-defined metrics – one million robotaxis and one million Optimus robots, for example – in order to receive the nearly $1 trillion in potential compensation.
But not everyone is ready to take that leap of faith just yet. Investor Louis Gerard argues that before Tesla earns his confidence as a long-term investment, the company needs to start translating those headline-grabbing goals into measurable, real-world results.
“Moonshot projects like Robotaxi and Optimus drive hype yet lack measurable milestones or financial impact, leaving fundamentals anchored in EVs,” Gerard opined.
On that note, Gerard argues that the recent uptick in Q3 sales wasn’t so encouraging, as the company’s record revenues were largely driven by the expiration of the EV consumer tax credit. Moreover, shrinking margins are raising “alarm bells” for the company, especially as R&D spending on AI and robotics is increasing.
Adding to those concerns, Gerard doubts Tesla’s ability to meet its own near-term timelines. He notes that Musk’s pledge to have large parts of Austin covered by robotaxis by year-end is unlikely to materialize, especially given unresolved safety and regulatory hurdles that still stand in the way.
That has given rise to a “ludicrous” valuation, according to Gerard, especially given that the company has experienced “relatively poor” growth during the past three years. In his view, it’s a clear sign that the current setup isn’t built to last.
“The growth metrics of the past do not indicate that the stock is worth a P/E of 300, and this P/E is still heavily reliant on moonshot programs that have a large risk of failure,” concludes Gerard, who is assigning TSLA a Sell rating. (To watch Louis Gerard’s track record, click here)
On Wall Street, TSLA is firmly split, with 11 Buys, 12 Holds, and 9 Sells – leaving the stock stuck with a consensus Hold (i.e., Neutral) rating. And while opinions vary, the Street’s average 12-month price target of $382.87 suggests shares could slide by ~22% from here. (See TSLA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.