Dean of Valuation Aswath Damodaran Tells Why He Sold Tesla (TSLA) Shares

We recently published These 10 Stocks are Buzzing After Important Analyst Calls. Tesla Inc (NASDAQ:TSLA) is one of the stocks analysts were recently talking about.

Aswath Damodaran, NYU Stern School of Business professor of finance, recently explained in a program on CNBC why he trimmed his stake in Tesla.

“It’s not because I don’t like the company. I like the company. If there’s any company where a CEO can reframe an electric car company into a robotics company, well, Elon Musk is that. I think my concern at with Tesla Inc (NASDAQ:TSLA) has become a political stock and I’m terrible at politics. I don’t want to have investments or I’m trying to figure out what the politics of the model will look like. So my reason for selling Tesla Inc (NASDAQ:TSLA) was not because I don’t like the company but because I don’t want my investments and politics to mix together.”

Tesla recently rallied after Musk bought back $1 billion worth of TSLA shares. Tesla’s EV sales are falling all over the world as the company faces challenges from competitors. Tesla’s global sales in the second quarter fell 14% year over year. Even if Elon Musk increases his focus to fix the company’s problems, it would take a lot of effort to come out of the demand crisis. For example, in California, the largest U.S. market for electric vehicle adoption and sales, Tesla sales fell about 12% year over year in 2024, causing its market share to drop from 60.1% in 2023 to 52.5% in 2024. Was it because Californians are buying fewer EVs? No. Californians purchased more than 2 million electric cars during the year, almost double when compared to the past two years.

While we acknowledge the risk and potential of TSLA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSLA and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.