As of October 12, Tesla Inc. (NASDAQ:TSLA) shares have climbed about 3% over the past five days. The rally began after Q3 deliveries came in at 486,532, well above the roughly 462,000 analysts expected. Deliveries were still down about 2% from a year earlier, though. More European countries have also approved Tesla’s supervised FSD software. Even after the bounce, the stock is down about 15% this year. All eyes are now on its Q3 earnings, due October 21. TSLA’s next catalyst may be earnings, but its longer-term prospects are worth watching too. See why Tesla ranks third among 10 stocks that could change the world by 2030.
Investors Are Buying the Future
On October 6, Goldman Sachs made a point I agree with. It said Tesla’s stock will move more on robotaxi, FSD, and Optimus updates than on quarterly earnings. Goldman kept a Neutral rating with a $360 price target, below where the stock trades today. That says a lot about how the market values Tesla. The car business is barely growing, yet the stock trades as if robotaxis and robots are already working at scale. Tesla has started putting its Cybercab into limited service in Austin. But Waymo already completes over 500,000 paid rides a week across 15 U.S. cities, so Tesla still has a lot of ground to cover. The company has big ambitions in autonomous driving and robotics, but how does it compare with ARK Invest’s other high-conviction picks?
The Valuation Asks Investors to Wait Until 2029
Tesla’s valuation is hard to defend on current earnings. The forward non-GAAP P/E of 219.06x sits about 81% above its 5-year average of 121.30x. The forward Price-to-sales ratio of 14.08x is also about 35% above its average of 10.41x. With multiples that high, you’d expect the EPS trajectory to be exceptional. But analysts expect growth of just 5% in 2026 and 23% in 2027. The big jumps only come later, with growth of 51% in 2028 and 101% in 2029. Even based on 2029 earnings, the P/E would still be about 59x. Tesla held about $34.4 billion more in cash and short-term investments than outstanding debt at the end of Q2, providing financial flexibility for its AI investments. Still, the stock leaves little room for delays, and robotaxi timelines have slipped before.
Fewer hedge funds held Tesla in Q2, with the count falling from 123 in Q1 to 116 in Q2. The value of their stakes, though, edged up from $23.1 billion to $23.8 billion.
Tesla’s future could be huge if robotaxis and Optimus deliver. But based on the numbers, I don’t think the stock is worth buying at this price. Investors are paying today for earnings that may not arrive until 2029, and even then the stock wouldn’t look cheap.
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