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10 Best AI Stock Picks of Motley Fool Asset Management. Tesla, Inc. (NASDAQ:TSLA) ranks #10 (see the 5 Best AI Stock Picks of Motley Fool Asset Management).
Tesla Inc. (NASDAQ:TSLA) shares are down 8% so far this year, and bears believe the selloff could continue. Tesla’s profitability and margins are eroding due to falling market share as the company loses pricing power in a bid to gain customers. Tesla Q4 deliveries fell 16% year over year amid intense competition from other EV makers. Chinese auto giant BYD earlier this year surpassed Tesla Inc. (NASDAQ:TSLA) as the world’s biggest seller of electric vehicles on a calendar-year basis.
In Q1 this year, Tesla delivered 358,023 vehicles, while Wall Street was expecting about 370,000 deliveries.
Tesla Inc. (NASDAQ:TSLA) bulls point to Cybertruck as a potential new growth engine. However, registration and delivery tracking data indicate that Cybertruck volumes remain a small fraction of Tesla’s overall shipments. In Q1, Tesla Cybertruck deliveries hit the lowest figure since deliveries began in November 2023.
Despite these weaknesses, Tesla Inc. (NASDAQ:TSLA) has a forward P/E of 166x, highlighting a massive premium even after recent declines.
JPMorgan believes Tesla Inc. (NASDAQ:TSLA) faces a significant downside amid weak fundamentals, delivery trends and a year-over-year decline in energy storage installations. The firm also highlighted what it sees as a disconnect between fundamentals and valuation, noting that Tesla shares are trading more than 50% higher than when deliveries peaked in June 2022, despite sluggish delivery growth since then. JPMorgan maintained its $145 price target for Tesla Inc. (NASDAQ:TSLA), which indicates a massive downsize compared with the current level.
Baron Partners Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its fourth quarter 2025 investor letter:
“In 2025, we exited 30.5% of our position in Tesla, Inc. (NASDAQ:TSLA). We are extremely confident in the company’s prospects and ability to become a significantly more valuable business. Tesla remains a top holding of the Fund. The disposition was a portfolio construction decision and not reflective of reduced confidence in the business.” (Click Here To Read The Letter in Detail)
A Tesla car. Photo from Tesla website
While we acknowledge the potential of TSLA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.