"On the surface, shares of Elon Musk's EV titan Tesla ( NASDAQ:TSLA) look quite expensive, especially after gaining more than 41% in the past six months. Undoubtedly, 300 times trailing price-to-earnings (P/E) is a high price to pay for an electric vehicle firm, even if there are some huge catalysts on the horizon that could allow Tesla to comfortably grow into its multiple."
"As we enter the year of physical AI, questions linger as to whether it's time to value Tesla stock more for the potential behind its Optimus robot and the robotaxi opportunity at hand. These are massive markets that could make the priciest-looking member of the Mag Seven actually prove too cheap. In any case, shares of Tesla are just over 8% from their all-time highs."
"Of course, there's bound to be intense competition in robotaxis, especially as new entrants and underrated players (think Amazon ( NASDAQ:AMZN) and Zoox) look to get a piece of the opportunity to be had. With Nvidia ( NASDAQ:NVDA) also getting in on the action, with plans to launch a service in 2027, Tesla will need to stay on its toes if it's to hang onto its premium multiple."
Tesla trades at roughly 300 times trailing P/E after rising over 41% in six months, making the stock appear expensive. The Optimus humanoid robot and a potential robotaxi business represent massive growth catalysts that could justify the valuation. The robotaxi market is expected to accelerate in 2026 and over the following three years, but competition from Amazon, Zoox, Nvidia, and possibly Apple could erode market share and margins. Nvidia plans to launch a robotaxi service in 2027. Tesla sits just over 8% from all-time highs and faces pressure to maintain its premium multiple as rivals enter the space.
Read at 24/7 Wall St.
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