"The Magnificent Seven stocks have a long history of outperforming the stock market and leading market indices to new highs. Each of these stocks leverages AI to explore new business opportunities and expand their market share. However, one of these stocks is more overvalued than the others and doesn't offer as much margin of safety. Tesla ( NASDAQ:TSLA), despite being led by one of the most capable CEOs, has a lofty valuation and declining profits."
"Its EVs revolutionized car manufacturing, but future growth will be more difficult. Tesla Is A Speculative Bet On Future Ideas The bullish thesis around Tesla is that its self-driving cars and humanoid robots will become mainstream products that justify the current valuation. While those two products have vast potential, other tech giants have noticed. Alphabet ( NASDAQ:GOOG) is already ahead of Tesla with its autonomous vehicles. Waymo has received more green lights from various U.S. cities and has even driven on some highways."
Tesla carries a high valuation and declining profits despite pioneering electric vehicle manufacturing. Future growth depends on speculative products such as self-driving cars and humanoid robots that face competition from Alphabet's Waymo in autonomy and BYD in robotics, with trade restrictions limiting BYD in the U.S. Most revenue remains automotive: Q3 revenue was $28.1 billion, with $21.2 billion from automobile sales (75%). Tesla's valuation far exceeds legacy automakers like Ford and Toyota, which generate more revenue and profits. Delays or underperformance of future projects could pressure Tesla's stock.
Read at 24/7 Wall St.
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