1 Reason Tesla Stock Is Called a

1 Reason Tesla Stock Is Called a Most Undervalued AI Name

One veteran analyst considers Tesla the "most undervalued AI name." While Tesla (TSLA) shares have surged to record highs in 2025, the real growth potential lies not in manufacturing cars but in artificial intelligence (AI), which could be the biggest growth opportunity in history.

Tesla’s Valuation Compared to Competitors

Tesla is primarily seen as an electric vehicle (EV) stock. However, its shares trade at nearly 17 times sales, significantly higher than EV competitors like Rivian Automotive and Lucid Group, which trade between 3 and 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, supported by a $1.4 trillion market capitalization.
The EV industry has seen many financial failures; over 30 EV start-ups have failed in the past decade alone.
Launching an EV brand requires billions of dollars and often takes 10 to 20 years to go from design to production.
Start-ups without existing manufacturing infrastructure face ongoing funding challenges.

"It can take 10 to 20 years to bring a new vehicle from design to production, especially if the start-up in question has no existing manufacturing infrastructure."

Starting an EV business with a single production model demands massive investment and continuous access to financial markets.

Author’s Summary

Tesla’s stock valuation reflects not just its EV leadership but vast potential in AI, positioning it for extraordinary future growth beyond traditional manufacturing.

The Motley Fool — 2025-11-04