1 Reason Tesla Stock Is Called a "Most Undervalued AI Name"
One experienced analyst considers Tesla the "most undervalued AI name." Tesla's shares (TSLA 3.56%) have surged to new all-time highs in 2025, with even greater potential for growth in 2026. This expected growth is largely unrelated to car manufacturing and is instead tied to what could become the biggest growth opportunity in history: artificial intelligence (AI).
Tesla's Valuation Compared to EV Competitors
While Tesla is often seen as an electric vehicle (EV) stock, its valuation reveals a notable difference. Tesla’s shares currently trade at nearly 17 times sales, whereas EV competitors like Rivian Automotive and Lucid Group trade between 3 to 7 times sales.
Reasons for Tesla’s High Valuation
- Tesla is a proven EV manufacturer with global brand recognition.
- It has unparalleled access to capital, reflected in its $1.4 trillion market cap.
- The EV industry is risky, with over 30 start-ups failing in the past decade alone.
- Bringing a new vehicle from design to production can take 10 to 20 years, especially for start-ups without manufacturing infrastructure.
- Launching an EV business with just one model on the market requires billions of dollars and constant financial market support.
Tesla is a proven EV maker with worldwide name recognition and unparalleled access to capital given its $1.4 trillion market cap.
These factors justify the premium on Tesla's valuation compared to newer EV entrants struggling to establish themselves.
Author's Summary
Tesla's market value reflects not only its EV leadership but also its unique positioning as an undervalued player poised to capitalize on artificial intelligence innovation.