The world’s richest man, Elon Musk — founder of companies like Tesla TSLA, SpaceX and xAI — is known for shaking up industries, whether it’s electric vehicles (EVs) or space exploration. This charismatic and arguably the most influential businessman has a dedicated fan base as well as haters. It’s like you either believe in him or you don’t.
He makes big promises and, well, also delivers on some! If you had to list his boldest predictions, you probably wouldn’t struggle to come up with a few. But which one stands out the most?
We’d say it’s his comments on Tesla’s latestearnings call Musk believes Tesla won’t just be the most valuable company in the world but it could be worth more than the next top five companies combined— i.e. Apple AAPL, Microsoft MSFT, NVIDIA NVDA, Alphabet GOOGL and Amazon AMZN. Whoa!
And what’s driving his confidence? Artificial intelligence (AI), autonomous vehicles (AVs) and the Optimus robot. Musk thinks that Optimus robot could generate $10 trillion in revenues in the long term. Let that sink in.
Given Musk’s history of sky-high promises, should you buy Tesla stock just yet? Let’s break down his claims and Tesla’s progress on these fronts to see if it’s worth buying the stock now.
Musk’s Big Claims on AI & Optimus
Since last year, Musk has been urging investors to view Tesla primarily through the lens of AI and robotics rather than solely as an automotive company. And on the latestearnings call he went on to say, “I see a path of Tesla being the most valuable company in the world by far. Not even close, like maybe several times more than -- I mean, there is a path where Tesla is worth more than the next top five companies combined. I mean, I think it’s like…a difficult path but it is an achievable path. And that is overwhelmingly due to autonomous vehicles and autonomous humanoid robots.”
And here’s more, “I think it probably will be viewed '25 as maybe the most important year in Tesla's history. There is no company in the world that is as good in real-world AI as Tesla. I don't even know who's in second place. Like you say, like, who's in the second place for real-world AI? I would need a very big telescope to see them.” Confidence or just blind faith in his company? You decide.
He continued, “I think long-term, Optimus has the potential to be north of $10 trillion in revenue. With regard to Optimus, obviously, I'm making these revenue predictions that sound absolutely insane, I realize that. But they are -- I think they will prove to be accurate.”
Well, let’s first give credit to Musk for at least acknowledging that this $10 trillion revenue projection for Optimus sounds too far-fetched now. But the fact that he thinks it still might be achievable is a bit tough to digest.
Musk expects the company to build several thousands of Optimus this year, if not 10,000, which he plans to use in Tesla factories for doing monotonous stuff. And by the second half of next year, he plans to deliver Optimus robots to companies that are outside of Tesla. That’s Musk’s rough guess. He also said that once production is steady at 1 million units a year (yes, that’s right), it could cost $20,000. And is there any timeline for this 1 million units of Optimus production? No.
Fortune Business Insights projects the global humanoid market size to grow to $66 billion by 2032, implying a CAGR of 45.5% during 2024-2032. While the growth projection is indeed impressive, it’s important to note that even if Tesla’s Optimus captures the total addressable market, Musk’s forecast of the $10 trillion revenue opportunity seems quite unreasonable at this point.
Now, these claims are classic Musk. When times get tough, Musk has a habit of promising groundbreaking technological advancements or making next-level bold predictions in a bid to regain investors' faith and ignite excitement about Tesla’s future.
TSLA’s Progress in the AV and Robotaxi Domain
Tesla is set to launch unsupervised Full Self-Driving (FSD) as a paid service in Austin this June. It rolled out FSD Version 13 in December. The company is already operating its vehicles autonomously at its Fremont factory, and Texas is next on the list. It will likely expand unsupervised FSD to several regions across the United States by year-end, including Texas and California, upon receipt of regulatory approvals.
With Musk now leading the newly created Department of Government Efficiency under Trump, regulatory simplification for AV deployment could give Tesla a big boost. But even with that tailwind, Alphabet’s Waymo is still the clear leader in the AV and robotaxi race. With years of experience, extensive real-world testing and strategic partnerships, Waymo is already running commercial services in multiple cities. And with Alphabet committing $5 billion to the effort, Waymo looks ready to lock in its dominance.
For Tesla, 2025 is shaping up to be a pivotal year—a prove-it year. Can it finally deliver on its long-promised robotaxi vision? That’s the big question. And whether to bet on the stock now solely based on its ambitious promises is probably a bigger question.
TSLA’s Price Performance & Valuation
Tesla soared in the last two months of 2024 thanks to Trump’s election win and Musk’s close ties with the President. But the stock has been shedding off its gains lately. Just yesterday, TSLA stock fell around 5% (more than its Mag 7 peers) amid Trump’s tariff imposition. In fact, TSLA was one of the worst-performing stocks in the S&P 500 yesterday.
TSLA’s YTD Price Performance Vs. its Mega Tech Peers
Image Source: Zacks Investment Research
From a valuation perspective, Tesla looks overvalued. Based on its price/sales ratio, the company is trading at a forward sales multiple of 10.77, higher than its 5-year average. TSLA has a Value Score of F.
Image Source: Zacks Investment Research
Estimates for Tesla Southbound
Over the past seven days, Tesla’s earnings estimates have moved down, reflecting analysts’ growing pessimism on the stock.
Image Source: Zacks Investment Research
How to Play Tesla Now
Tesla’s EV business is not in great shape now but there are a few things working for Tesla — its thriving Energy Storage business, solid balance sheet and opportunities in charging business also. However, Tesla is positioning itself more as an AI-robotics company rather than an auto company.
The Cybercab isn't expected to achieve mass production before 2026, and it’s way too risky to be too optimistic about Optimus now. The production of this humanoid robot is unlikely to scale meaningfully enough to justify Musk’s bold revenue targets for many more years. As far as the Robotaxi promises go, it’s better to see if the company can actually meet its goals for this year. Investors should not forget Tesla's history of delays and missed deadlines. Remember, the Roadster vehicle hype. Preorders opened way back in 2017 with a $50,000 deposit, and seven years later, many customers are still waiting with no clear timeline for delivery.
TSLA seriously needs to deliver tangible results to justify the hype around its AI and AV ambitions. For now, it seems too premature to invest just in Musk’s dreams and ultra-ambitious plans.
In light of the current circumstances, we think Tesla should be avoided for now. The company carries a Zacks Rank #5 (Strong Sell) currently.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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