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Hello everyone, this is Julie from TipRanks, and I'm pleased to welcome back Street Pros CEO Jason Meshnick, with whom we'll be delving into Tesla stock today. So, Jason, thank you, as always, for joining me. Thanks for the invite, Julie. I'm really excited about this issue because it was fun to write the article, as well as to communicate with our authors.
So I think we'll have an interesting conversation, too. Certainly. Tesla stock is always a hot topic because there is never a shortage of exciting events. Of course, Tesla just had one of the biggest post-earnings sell-offs in years, with shares down 40% from their peaks last December. Some investors are calling this sale a gift.
Others say the stock is still significantly overvalued. So we'll look at both sides today as we heard the opinions of some Street Pro writers this week. So, let's talk about how Tesla faltered after its earnings report. What really scared the market? Is it AI spending, competition with Chinese electric cars, or a shift to robotics?
Yeah, I guess it's a little bit from everyone, right ? Tesla stock has never been a safe, reliable asset. This is always a choice for those who are willing to take a little risk. What happened in this case was that Tesla said, "Hey, we're going to spend $25 billion on capital investment ." And, you know, that seems like a lot of money.
And that's a lot of money, especially considering that Tesla spent $8.5 billion in 2025. And some people wonder, well, where will this money come from? You know, a big part of it is spending on AI. There is a lot of competition for money spent on AI . How will Tesla raise this money? It also looks like it will take at least another two to three years to develop the robotaxi and the Optimus robot.
So, it's kind of all together. Robotaxi, in particular, is being implemented much more slowly than promised. However, this is typical of Elon Musk. You know, he said that half of us in this country will be riding robo- taxis by the end of 2025 . It's already more than half of 2026 , and I still haven't seen one in the metropolis where I live.
So, let's see. The other thing they're focused on, of course, is a story that's increasingly about Optimus and AI, rather than selling cars, the electric car business that they were originally based on. So, do you think this is a legitimate long-term business opportunity or is it just a way to divert attention from their electric car sales?
Yes. I mean, is this a real shift in strategy? Some Street Pros writers believe so. Hmm, I think maybe so. You know, it's worth thinking about this : in the article I point out that Elon Musk really opened the electric car market for the whole world and for China in particular. So China really owes Elon Musk a debt of gratitude, but at the same time, they repay the rest of the world by producing great electric cars at a very low price that Tesla and others simply can't compete with, right?
So we are seeing mass layoffs at VW and some other manufacturers. Germans hate firing people, don't they? Of course. So the fact that VW is having to lay people off means that there's a lot going on in the auto industry right now , and I think a lot of it has to do with people liking these Chinese- made electric cars.
You know, people idolize Elon Musk, and they will buy everything he does, everything he says he wants to do. And so what we can observe is the greatest corporate turnaround of all time, right? It's definitely the biggest company, worth a ton of money, but people look at Tesla as a startup, right? And so, here's what they do: they say, "Okay, this is just a twist." Um, they're learning a lot from self-driving cars, and self-driving cars are essentially robots, so now they're just going to bring them into the home.
And our authors see a great opportunity in home robotics, but there are a lot of risks, right? And one more thing: as we see with robotaxi, home adoption is probably not going to be as fast as Elon Musk says. Now let's talk about cost estimation. Even though Tesla shares have fallen from their previous peaks, they are still trading at around , it seems, between 270 and 280 times earnings.
Obviously, that's a big number, but is it cheap enough to buy, or is it still expensive? So, Julie, let me start by saying that I received one of my favorite comments when I recently recorded a video with Ed Ponzi about Tesla. And one big Tesla fan said, and I quote, " Jason is an ignoramus." And, you know, maybe I really am.
I don't know. I like it. I think this is great. What a cool word. I don't take this as an insult. I take it that this person is very passionate. And there are many such passionate people about Tesla. So you ask, is a Tesla cheap enough to buy? Well, as an ignorant person, I'm not entirely sure . The stock is trading around 300.
Last time I checked, it fell again today. Um, they have a P/E ratio, price to earnings, of 260, and a price to sales ratio of 15. There is nothing in this stock right now that would be suitable for investment. However, it is suitable for trade. It is very suitable for trade. And I think if you are a trader, I see no reason not to start considering it at this level.
We'll talk about this in a little more detail. I think so, but you know, the first time the price reached $300 was in January 2021 . So, the stock has actually been moving sideways for several years. I kind of think so: you know, they were overvalued then, overvalued today , and I think it will be, I don't know, 10 years before this company stops being overvalued.
I truly believe you are dealing with an overvalued stock that is suitable for traders. Ah, says this ignoramus. Why do you think so many investors are willing to ignore valuation when it comes to Tesla? Yes, that's a great question. This is the number one question, I think, when it comes to Tesla, and I believe there are three main reasons.
Okay, the first one, as we've talked about, you know, is the cult of Elon, and I don't think the cult of Elon is necessarily a bad thing, right? Every CEO, founder, or whoever wants people to reject belief in reality about their products and only believe in the best that can happen to those products, right?
And that's exactly what people are doing to Elon. And he created some amazing products . As I said, I have a Tesla. This is a great car. My wife won't give it up. She is simply delighted with it. It created a lot of value for a lot of people, a lot of money for a lot of people, but it also really changed entire industries.
So, there's a lot to this. The second is that it is actually an AI company, and AI is something very important right now, and people turn a blind eye to a lot of AI assessments. But I think the third thing, perhaps the most important, is that I think the market is broken right now, and it's broken for the best of reasons.
Well, it's not like there's some group that's saying we should, you know, hurt investors . In fact, people have said that the best way for investors to invest in the market is to consider passive investing in index funds. And so when Tesla started growing, you know, it's one of the top 10 companies in America now, right?
When you buy an index fund, you are already buying Tesla. Tesla is one of only a handful of stocks that make up 40% of our market right now. So every time you buy an index fund, $40 of every $100 you spend goes to companies like Tesla, right? So that's one of the reasons why Tesla continues to, well, it's not growing right now , but that's what helps create a floor for Tesla—that's the demand from index funds.
Well, when we talk about the threshold, I believe Helen Meisler and Ed Ponzi highlight the $280 to $300 range as an important support zone for Tesla stock. So what do they see on the chart that makes this level so significant? Support is really just an area that a stock has likely fallen to in the past, right ?
The stock was above this level, dropped to it and held. Sometimes there is also a level we call resistance, a zone that the stock previously had difficulty overcoming. So every time the stock went up, let's say, to 300, the sellers would come in and sell, sell, right? Maybe because they bought cheaper, took profits, or something else, but eventually the stock rose above 300, and then eventually returned to that level.
And that's what we're seeing now, that Tesla has gone up to 300 many times. It sold off, then finally broke through the level, and earlier last year, in 2025, the stock fell back down to 300, and that level has held, right? So, they are now looking at this level as a potential area that has been interesting in the past and will likely be interesting in the future.
So they think that 280–300 is an interesting zone that could be the first level. If it breaks through it, you know, the price could drop to 250 or even lower. Another interesting question from the survey of Wall Street professionals: which will come first — Tesla at 250 or Tesla at 450? That's right.
Four of our experts said this stock is too volatile. In no case will I make assumptions. Tomorrow it could be 500. And the day after tomorrow it could drop to 200. So they just didn't want to guess. One person, I don't remember who exactly, probably Ed Ponzi, because he's an optimist, said that he thought 450 would be the first.
Two, however, were expecting 250 . I, Jason, will rejoin the 250 camp because it's just closer to that level. And you know, Tesla is a very volatile stock. I see better support around the 250 level than 300. So I think if it doesn't hold at 300, Tesla is so volatile that we could see 250. If someone wants to buy Tesla stock, how would you advise them to do it wisely?
Should you buy now, wait for the support level, or stay away for now? Well, as we said, most of us already own Tesla shares. So if you want to buy Tesla, the best thing to do is just buy more of that index fund you have and invest in Tesla. And otherwise, again, I see Tesla as a trading tool that will have significant fluctuations: big ups and big downs, so it's not for the faint of heart.
But if you are a long-term investor, you should choose your entry points. People talk a lot about buying on the dip. There's nothing wrong with buying into the dips of great companies. Tesla is a great company in many ways . My problem is the valuation. Therefore, I believe that you should buy not on small pullbacks, but during serious corrections.
So, we are now in the midst of a major correction. Tesla has fallen, you know, by more than 40%. This is a big correction. So, if you really like this company, this is a good place to start buying a little bit. But both Ed and Helen believe there is no rush. When Tesla makes such big moves downward, it doesn't bottom in one day.
The bottom forms over a period of several weeks or perhaps even longer. OK. And finally, I want to play devil's advocate a little. What do you think is the strongest argument in favor of buying Tesla today, and what is the strongest argument against it? I like this question. I believe that every investor, optimist or pessimist, should always think about the pros and cons of their investments.
What are your arguments for and against? Vitaly Katsnelson, who I've known for many years, a financial manager here in Denver and a value investor, is a very prolific author. He said he only wrote to understand what he was really thinking. Yes? I always advise people to do the same thing: you don't know what you're thinking until you write it down.
And as I was preparing for today's meeting, I had an epiphany about Tesla, which I'll talk about in a moment. Let's start with the arguments for. So, as we said, technically Tesla is trading at a support level. So it's trading at a level where the risk is lower if you want to buy shares. There's still Elon Musk, right?
This man is a genius. He aims to make Tesla worth, what was the figure there? $8 trillion or something like that, and then he'll have a trillion dollar income. So it is in his interest to raise the share price, and he will do everything possible to do so. Never underestimate Elon Musk. Maybe he'll merge the company with SpaceX to create, you know, a multi-trillion dollar megacorporation.
And also, you know what if robots became commonplace? I always worry when I look back while recording a video if the robot is going down the stairs, and it makes me nervous. But, as Ed Ponzi said, 30 or 40 years ago, having a PC at home was, well, unusual. And today, how many of them do we have? We carry PCs, we carry computers in our pockets.
So, those are all the pros and cons. The most important one, which we have already talked about, is cost estimation. Many of us own these stocks. But I will highlight the biggest factor that I mentioned while preparing for the broadcast, which is China. Risks associated with China. The automotive industry, as I said, is currently experiencing major upheavals due to the influence of China.
Competition coming from China. Elon Musk and all his businesses—from cars to future robots and artificial intelligence— are areas where China also seeks to dominate. So Elon Musk is not just facing the risks of one industry like other companies, he is dealing with geopolitical risks. He competes with the entire country.
Maybe in the US we can contain China, as we are doing now in the auto industry, but will it be possible in other sectors? This is probably the most important question . In addition, the main risk for Tesla always remains dependence on one person. If something happens to Elon Musk, what awaits Tesla?
I think stocks can fall 50% or more in one day. OK. Good. Thanks for your thoughts, Jason, especially regarding such an interesting company as Tesla. There are many aspects to think about. Our viewers can go to Street Pro, read Jason's full article, and then take a look at TipRanks. There you can find out what analysts think about these stocks .
Remember , these videos are not a recommendation to buy or sell stocks, so always do your own research. Jason, thanks again for joining me, see you next week. Perfectly. Thank you very much, Julie.
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