1 Reason Tesla Stock Is Called Undervalued
According to a veteran market analyst, Tesla stands out as the most undervalued company in the field of artificial intelligence. Despite its record-breaking stock performance in 2025, expectations remain high for 2026 — not mainly because of electric vehicles, but due to Tesla’s expanding work in AI technology.
Tesla’s Shifting Identity
Traditionally seen as an electric vehicle manufacturer, Tesla is now being increasingly recognized for its innovations in artificial intelligence. This new focus could mark one of the most significant business transformations of the decade, as the company diversifies its technology base beyond cars.
Valuation and Market Comparison
Tesla’s market valuation remains exceptional. Its stock trades at around 17 times sales, while other EV makers such as Rivian Automotive and Lucid Group are valued at just 3 to 7 times sales. The gap underscores Tesla’s established reputation and financial advantage.
Reasons Behind Tesla’s Premium
- Tesla is a proven global EV leader with unmatched brand recognition.
- The company’s market capitalization of $1.4 trillion provides easy access to capital — a critical resource in a high-cost, high-risk industry.
Many EV start-ups have not survived the financial and logistical hurdles of car manufacturing. In the past decade, over 30 such ventures have failed. Launching a successful EV model from concept to production can take up to 20 years and requires heavy investments, making capital strength a decisive factor for survival.
“It can take 10 to 20 years to bring a new vehicle from design to production, especially if the start-up has no manufacturing base.”
Author Summary
Tesla’s strong financial position and AI focus are redefining its market perception, suggesting greater long-term potential beyond electric vehicles.