Elon Musk said Tesla could eventually be worth more than the next five most valuable companies combined, implying a market value of roughly $15 trillion.
Tesla reported disastrous financial results in the first quarter as demand declined, but Musk says plans for robotaxis and autonomous robots are on track.
Tesla will launch an autonomous ride-sharing service in Austin by June, and Musk thinks the company could eventually grab 99% market share in robotaxis.
Tesla(NASDAQ: TSLA) stock has tumbled 30% year to date due to dismal financial results and market share losses. The company's performance ranks among the worst in the S&P 500(SNPINDEX: ^GSPC), but CEO Elon Musk has repeatedly made the same bold claim.
"I see a path for Tesla being the most valuable company in the world by far. There is a path where Tesla is worth more than the next top five companies combined," Musk told analysts on the fourth-quarter 2024 earnings call.
"I think Tesla will be the most valuable company in the world by far. It may be as valuable as the next five companies combined," Musk told analysts on the Q1 2025 earnings call.
The five largest companies -- Apple, Microsoft, Nvidia, Amazon, and Alphabet -- were worth nearly $15 trillion when Musk first said Tesla could surpass their combined market values. The implied 17-fold return from its current market value of $879 billion means $50,000 invested in Tesla stock today could be worth $850,000 in the future.
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Tesla reported dismal financial results, but Elon Musk shared some good news
Earlier this month, Tesla said first-quarter vehicle deliveries declined 13% to 336,681, the lowest total in three years. That led to disastrous first-quarter financial results that missed estimates on the top and bottom lines. Revenue fell 9% to $19.3 billion, operating margin contracted to a six-year low, and non-GAAP (non-generally accepted accounting principles) net income plunged 40% to $0.27 per share.
Tesla also withheld guidance due to uncertainty created by shifting U.S. trade policies, but investors did get some good news on the quarterly earnings call. CEO Elon Musk reiterated plans to launch an autonomous ride-sharing (robotaxi) service in Austin by June and said Tesla would have thousands of autonomous robots working in its factories this year.
Those updates are particularly important because Musk says his confidence that Tesla can become the most valuable company is "overwhelmingly due to autonomous vehicles and autonomous humanoid robots."
Image source: Getty Images.
Autonomous ride-sharing (robotaxi) services are a massive opportunity for Tesla
Alphabet's Waymo is currently the market leader in autonomous ride-sharing. Its robotaxis provide more than 250,000 rides weekly across several major U.S. cities, and the company is expanding to new metropolitan areas at a steady clip: Atlanta, Miami, and Washington, D.C., are next. But Tesla could catch up quickly due to two advantages.
First, Tesla has more camera-equipped vehicles on the road collecting video, which means it has more training data to inform the artificial intelligence (AI) models that power its full self-driving (FSD) software. And second, Waymo uses an expensive combination of cameras, radar, and lidar to power its robotaxis, whereas Tesla relies solely on computer vision.
That strategy is not only less costly -- Waymo spends $100,000 on equipment alone for its cars, while Tesla can build Cybercabs for less than $30,000 -- but also more scalable. Lidar requires high-definition maps, so Waymo must map streets in meticulous detail before its robotaxis can function. Comparatively, Tesla should be able to launch autonomous ride-sharing without maps almost anywhere once FSD is perfected.
Musk thinks Tesla will capture 99% market share in autonomous ride-sharing. "I don't see anyone being able to compete with Tesla at present," he told analysts on the most recent earnings call. Musk expects robotaxis to "move the financial needle in a significant way" for Tesla by the middle of next year.
Adam Jonas at Morgan Stanley estimates Tesla will have 900,000 robotaxis on the road in 2035 and that each will earn about $93,800 in revenue. That implies total revenue exceeding $84 billion. Jonas expects $17 billion will hit the bottom line and thinks that figure could surpass $120 billion by 2040.
Tesla stock trades at an absurdly expensive valuation -- or does it?
Wall Street estimates Tesla's adjusted earnings will increase by 15% annually through 2026. That consensus makes the current valuation of 130 times adjusted earnings look absurdly expensive, especially since Tesla missed the consensus estimate by an average of 7% in the last four quarters, according to LSEG.
However, autonomous driving and humanoid robots represent massive opportunities. For instance, Morgan Stanley says Tesla's revenue could increase at 20% annually for the next 20 years if it executes on those opportunities. This implies faster earnings growth because robotaxis and robots would come with higher margins than electric cars. In that scenario, the current valuation may look quite reasonable in hindsight.
In summary, this is a tricky stock. Investors who lack conviction in Musk's vision should avoid it. There are plenty of other stocks worth owning. But investors who think Tesla can disrupt the global mobility and labor markets (with autonomous cars and robots) should absolutely own a position.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Amazon, Nvidia, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Microsoft, Nvidia, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
