Tesla Stock (TSLA) Set to Rediscover Uptrend as Political Headwinds Recede
After an overly turbulent period dominated by political headlines, attention is finally shifting back to Tesla (TSLA) and its broader vision. With Elon Musk's political distractions seemingly behind him after his fallout with the Trump administration, I believe the market can now start directing its attention to what truly matters—Tesla's execution across its most strategic fronts, from AI to clean energy, robotics, and mobility, as it redefines transportation with its bold vision for robotaxis.
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Even so, Tesla remains the second-worst performer among the Magnificent 7 in 2025, having already posted a year-to-date decline of 13%. Of course, beyond the noise from Musk's split with Trump, factors such as the slowdown in EV sales and intensifying competition in the automotive sector have also weighed heavily. Not to mention the broader macro backdrop—tariffs and ongoing recession fears—putting pressure on U.S. tech stocks in general.
With that in mind, the market is likely to revisit Tesla through the lens of these megatrends. Given that long-term bullish expectations seem to be another trend fueling the stock's high multiples—something that will probably support the thesis indefinitely—I'm leaning toward a bullish stance on TSLA.
Robotaxi Catalyst Looms on the Horizon
While many of Tesla's megatrend bets are still more concept than reality, the next big step toward delivering on its strategic vision appears to be robotaxis. Elon Musk has been promising this for nearly a decade, but the current environment might finally justify the long-standing optimism.
The highly anticipated official reveal of Tesla's Robotaxi was initially set for August 8, with Musk hinting it 'tentatively' on June 22. However, it now looks like the launch might be delayed until October. Initially, the project is expected to roll out a very limited fleet—approximately ten Model Y vehicles equipped with Full Self-Driving (FSD)—operating in Austin, Texas. These cars will reportedly still have remote human safety operators, meaning they'll only offer basic-level autonomy.
However, the reality is that Tesla is finally entering the robotaxi space, and it will face established players like Alphabet's (GOOGL) Waymo, which is already operating autonomous fleets in cities such as San Francisco, Phoenix, Austin, and Los Angeles. The key difference is in the tech approach. Waymo utilizes a sensor-rich system—comprising lidar, radar, and 29 cameras—for redundancy and safety. Tesla, on the other hand, is doubling down on a vision-only system, powered solely by cameras. Musk argues this method is more scalable, cost-effective, and better aligned with a human-like form of intelligence.
By pushing this approach, Musk is unofficially signaling his goal to make Tesla's robotaxi service as competitive as Uber (UBER). The hope, of course, is that costs will eventually come in lower than human-powered ridesharing. However, there are still real risks of overpromising—a familiar theme—especially when facing technical, regulatory, and safety hurdles, not to mention stiff competition from players like Waymo, which are already well ahead in deployment.
Even so, Tesla's robotaxi play is just one part of the broader megatrend strategy Musk is pursuing. If the company manages to deliver even a minimally viable product, in my view, the robotaxi launch could genuinely spark a new growth cycle and finally push Tesla deeper into the world of software, AI, and mobility-as-a-service (MaaS). In that case, market sentiment could skyrocket alongside the hopes of Tesla's most devoted bulls.
The Other Side of Tesla's Sky-High Multiples
All of Tesla's history of bold promises and ambition to be a megatrend player is evident in the numbers: the company is currently trading at 174.3x forward earnings. While analyst consensus is far from overwhelmingly bullish, it does project an EPS CAGR of 34.4% over the next five years, potentially leading to an EPS of $8.61 by the end of 2029. If Tesla even comes close to hitting that, its forward P/E would drop to a much more grounded 38.2x.
Looking at the same five-year horizon from the top-line perspective, consensus estimates project Tesla's revenue to reach $224.4 billion by 2029, implying a compound annual growth rate (CAGR) of 18.3%. In other words, Tesla would more than double its projected 2025 revenue of $97.6 billion.
For some perspective, Uber brought in $44 billion in total revenue last year. So, if Tesla were to capture even half of Uber's revenue annually through its robotaxi business over the next five years (which already seems extremely optimistic), and somehow manage net profit margins of 50% or more (even more upbeat), then we could—very loosely—justify a portion of the current valuation. More specifically, maybe about one-fifth of the projected 2029 profits.
Of course, as mentioned earlier, Tesla's bets on robotics, energy, and EVs must also be considered to fully understand its valuation. Even with these factors, the current thesis remains economically very optimistic, to say the least. Perhaps it's this pure uncertainty about how large and complex Tesla could become that keeps the stock trading at such stretched multiples—and honestly, that likely won't change anytime soon.
Among the 35 analysts covering Tesla over the past three months, 14 rate the stock a Buy, 12 are Neutral, and nine are Bearish. Despite this mixed sentiment, the consensus suggests Tesla may be overvalued, with an average stock price target of $286.14, implying roughly 11% downside from the current share price.
Why Missing Out on Tesla Could Be a Major Regret
With Elon Musk seemingly shifting focus away from political distractions, I believe Tesla stock could see more stability ahead. The upcoming Robotaxi event may serve as the next major catalyst, potentially reinforcing Tesla's position within the megatrends it's helping shape.
While current valuations may appear lofty or speculative, that's hardly new territory for Tesla. Historically, those who fixated too much on valuation often missed out on what turned out to be generational investment opportunities—and I wouldn't be surprised if history repeats itself.
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