1 Reason Tesla Stock Is Called the Most Undervalued AI Name
One veteran analyst considers Tesla the most undervalued AI company in the market. Shares of Tesla (TSLA +3.46%) have reached new record highs this year, and even greater growth could follow in 2026. This potential expansion is less about producing cars and more about the massive opportunities in artificial intelligence.
Tesla Beyond Electric Vehicles
Although Tesla is widely known as an electric vehicle (EV) manufacturer, its valuation suggests investors expect more than just car sales. The company's stock currently trades at nearly 17 times sales, compared to 3 to 7 times sales for rivals like Rivian Automotive and Lucid Group.
Why the Valuation Gap Exists
- Tesla is a proven EV maker with global brand recognition.
- It maintains unmatched access to capital, driven by its $1.4 trillion market value.
- This advantage matters in an industry full of financial struggles, where over 30 EV startups have failed in the last decade.
Challenges for New EV Manufacturers
Developing a single model and bringing it from concept to full-scale production can require billions of dollars and 10 to 20 years of development. Startups without established manufacturing infrastructure must frequently seek fresh funding to survive in this capital-intensive market.
"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."
Author’s Summary
Tesla’s premium valuation reflects its proven strength in EVs and investor confidence in its growing potential as an AI-driven enterprise.