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Tesla (Nasdaq: TSLA) is back in the spotlight after CEO Elon Musk purchased $1B worth of shares, sending the stock surging to levels not seen since early 2025. While the move signaled confidence, the company’s future rests less on its maturing EV business, which now faces slowing growth and rising competition, and more on bold bets like robotaxis, full self driving software, energy storage, and humanoid robotics. 

Musk’s $1T compensation package sets out staggering milestones, including 20M vehicle deliveries, 10M FSD subscriptions, and 1M robotaxis and robots, any of which could reshape Tesla’s trajectory if achieved.

Yet Wall Street remains skeptical. Revenues have been stuck near $90B since 2023, profit margins are under pressure, and Tesla has been ceding market share to rivals like BYD, Toyota, and Volkswagen. 

Despite this, Tesla’s valuation now eclipses the combined worth of several of the world’s largest automakers. Analysts like Seth Goldstein maintain a $250 fair value estimate, around 70% below where the stock trades today, arguing that investors are already pricing in success in industries that may still be years away from scaling.

That gap between current fundamentals and future potential poses the real dilemma: is Tesla’s trillion dollar valuation evidence of market euphoria, or are investors right to believe Musk can once again defy the odds and lead another technological revolution?

Let’s map it using the IDDA (Capital, Intentional, Fundamental, Sentimental, Technical):

IDDA Point 1 & 2: Capital & Intentional

Before investing in Tesla, ask yourself:

 Do you want exposure to a company that aims to transform not just autos, but also energy, autonomy, and robotics?

 Are you comfortable with a valuation that prices in massive success in industries that don’t yet exist at scale?

 Do you believe Elon Musk can deliver another “miracle” akin to Tesla’s EV revolution – despite growing competition and execution risks?

Tesla’s stock has a long history of volatility, swinging between euphoric rallies and sharp sell-offs. Shares recently jumped after Musk’s insider buy and expanded robotaxi testing in Nevada, but analysts caution that a full rollout may still be years away.

 For long-term investors, Tesla offers potential upside if its moonshot projects succeed, but for short term investors, elevated valuations and dependence on a single visionary leader make it a battleground stock. 

Ultimately, Tesla’s extreme swings may be better suited for those with a higher risk tolerance who can weather sharp pullbacks on the path to potential gains.

IDDA Point 3: Fundamentals

Tesla’s financial performance remains flat relative to its soaring valuation. Revenues have hovered around $90B since 2023, while gross margins are stagnant at their low point and accounts receivable continue to rise. Despite large capex spending, there are few positive financial trends. Fundamentally, the company is no longer expanding at the pace that once justified its premium multiples.

Competition has also intensified. Rivals like BYD now lead in sales and revenues, gaining global market share while Tesla’s automotive lineup ages. Although Tesla is still viewed as the dominant EV brand in market perception, the fundamentals show weakening momentum in its core auto business. Without meaningful innovation or refreshes, this may put Tesla at risk with its competitors.

Tesla’s valuation remains extremely stretched compared to its actual business performance. Its market value is now larger than Toyota, BYD, Volkswagen, and Ferrari combined, despite producing fewer cars and generating lower earnings. Analysts such as Seth Goldstein put Tesla’s fair value at around $250 a share, roughly 60 to 70% below where it currently trades. At these levels, the stock is considered significantly overpriced, with very little room for disappointment.

Musk’s $1T compensation package reflects both ambition and risk. The plan requires extreme milestones – 20M vehicles annually, 10M FSD subscriptions, 1M robotaxis, and 1M humanoid robots. These goals are far removed from Tesla’s actual results of approximately 1.7M annual vehicle deliveries. While the package effectively locks Musk into Tesla for at least the next decade, the gap between aspirations and present fundamentals is enormous, making today’s price difficult to justify.

Even Tesla’s promising next-gen projects face delays. Robotaxi testing has expanded to Nevada, but vehicles still require a driver and remain geofenced. Analysts now forecast a full commercial launch by 2028 – two years behind management’s guidance. Similarly, while energy storage and robotics carry long term potential, they remain early-stage contributors to profits. In short, Tesla’s fundamentals show a company falling behind on ambitious timelines while being priced as if it will successfully dominate entirely new industries, a setup that leaves investors highly exposed if future breakthroughs fail to materialize.

Fundamental Risk: Medium

IDDA Point 4: Sentimental

Strengths

Tesla can disrupt multiple industries – EVs, autonomous vehicles, energy storage, and humanoid robots.

Profit margins are expected to rise as production costs decline over time.

Full self-driving (FSD) software could drive new profits through robotaxis, wider adoption among Tesla owners, and licensing deals with other automakers.

Risks

Rising EV competition from both legacy automakers and startups could slow Tesla’s sales growth and pressure it to cut prices, squeezing margins.

Heavy investment in autonomy may destroy value if robotaxi rollouts face delays and lose ground to rivals like Waymo.

Elon Musk’s political activities risk alienating customers in key markets, potentially reducing demand and hurting profitability.

Investor sentiment around Tesla is fueled less by its current performance and more by faith in Elon Musk’s ability to deliver the next big breakthrough. The market values Tesla as a future leader in energy storage, robotaxis, and humanoid robotics – industries still far from generating significant profits. Musk’s insider buy and massive compensation package have strengthened retail investor confidence, but analysts remain cautious. Ultimately, optimism keeps the stock elevated, while valuations stay speculative and heavily reliant on one individual.

Sentimental Risk: High

IDDA Point 5: Technical

On the weekly chart:

 The last couple of candlesticks have broken above the Ichimoku cloud, which had been acting as a resistance zone.

 The bearish Ichimoku cloud is thinning, signaling a possible weakening in downward momentum.

 The most recent candlestick is a bearish spinning top, often a sign of indecision or slowing momentum.

Overall, TSLA’s weekly chart has been extremely choppy. In two recent uptrends, pullbacks retraced as much as 78%. Now, with price breaking above the cloud and the bearish momentum showing signs of easing, further upside is possible. However, traders should expect continued volatility and uneven price action along the way.

(Click on image to enlarge)

On the daily chart:

 The future cloud is bullish signifiying positive onward momentum

 The Ichimoku cloud is acting as a support zone

 The last couple of candlesticks are positioned far above the cloud, which suggests a pullback in the near term. 

The daily chart shows choppiness and volatility. In early 2025 it was on a downtrend after reaching a high of 488 due to concerns of Musk’s political involvement affecting Tesla, and this started to recover in early April however has caught up to the high of 488. The Ichimoku cloud is bullish signifying upward momentum and the candlesticks are above the cloud. The last couple of candlesticks are positioned far above the cloud which suggests a potential pullback in the near term. As Tesla known to be volatile, pullbacks can be as far as 78% retracement however as long as the cloud continues to act as a support zone, we can expect further upward momentum

(Click on image to enlarge)

Investors looking to get in TSLA can consider these Buy Limit Entries:

405.22 (High Risk)

354.31 (Medium Risk)

313.13 (Low Risk)

Investors looking to take profit can consider these Sell Limit Levels:

569.82(Short term)

619.32 (Medium term)

661.39 (Long term)

Here are the Invest Diva ‘Confidence Compass’ questions to ask yourself before buying at each level:

1. If I buy at this price and the price drops by another 50%, how would I feel? Would I panic, or would I buy more to dollar-cost average at lower prices? (hint: this question also reveals your CONFIDENCE in the asset you’re planning to invest in).
2. If I don’t buy at this price and the stock suddenly turns around and starts going up again, will I beat myself up for not having bought at this level?

Remember: Investing is personal, and what is right for me might not be right for you. Always do your own due diligence. You should ONLY invest based on your own risk tolerance and your timeframe for reaching your portfolio goals

Technical Risk: Medium – High

Final Thoughts on Tesla (TSLA)

Tesla is back in the spotlight after Elon Musk’s insider purchase boosted confidence, but the real story lies in the contrast between Wall Street’s caution and investors’ belief in Musk’s next big breakthrough. While revenues are flat, margins under pressure, and rivals gaining ground, Tesla is valued higher than many automakers combined – leading analysts to call it overvalued by as much as 70%.

Yet the market continues to price Tesla as a future leader in robotaxis, full self-driving, energy storage, and humanoid robotics, betting that Musk can once again defy the odds. Technically, momentum looks strong, but stretched candlesticks warn of a pullback, reinforcing that Tesla remains a volatile stock – best suited for those with higher risk tolerance who believe the “real story” is still ahead.

Key Takeaways:

 The debate around Tesla boils down to belief in Musk. Bulls see Tesla as much more than a carmaker, with the potential to lead entirely new industries. Bears see a company trading at valuations far beyond its current fundamentals, highly vulnerable to execution delays, competition, and Musk’s own risks. For long term investors, Tesla offers rare upside if its “next miracle” materializes. For short-term traders, momentum is strong, but stretched valuations and volatility demand careful timing.

Overall Stock Risk: Medium – High

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