Jeff Sonnenfeld, Senior Associate Dean at Yale School of Management, called Tesla “the biggest meme stock we’ve ever seen” during a CNBC interview. He pointed out how Tesla’s price-to-earnings ratio sits above 200, much higher than Nvidia, Apple, and Microsoft. Sonnenfeld said, “When you’ve got stocks like Nvidia, the price-earnings ratio is around 25 or 30, and Apple is maybe 35 or 36, Microsoft around the same. I mean, this is way out of line to be at a 220 PE. It’s crazy, and they’ve, I think, put a little too much emphasis on the magic wand of Musk.”
Tesla now trades at a price-to-earnings ratio in the 250–285 range. Most big tech companies stay in the 25–40 range. This puts Tesla well above rivals and has led analysts like Sonnenfeld to call attention to the mismatch between investor expectations and business fundamentals.
Musk’s $1 Billion Purchase
In September, Elon Musk bought about $1 billion in Tesla (TSLA) shares, around 2.57 million shares between $372 and $396 each. The purchase helped bump the stock up more than 6 percent, with prices reaching over $425. Tesla’s market cap hit $1.37 trillion, making it one of the largest U.S. companies.
Tesla’s car deliveries fell over 13 percent in each of the first two quarters of 2025. Chinese rival BYD has started outselling Tesla in some markets. Tesla’s profits and revenues have dropped, with analysts predicting sharper falls in the coming year. Wells Fargo expects Tesla’s earnings per share to fall 32 percent in 2025, and yearly sales to drop 52 percent.
Tesla says it is shifting focus to AI, robotaxis, and humanoid robots. The board proposed a new pay plan for Musk, worth up to $975 billion if Tesla hits tough goals like $8.5 trillion market value, 20 million vehicles sold by 2035, and a million robotaxis on the road. Analysts question these targets, noting declining car sales and strong competitors.
Investor Warnings
Some experts say Tesla’s current value depends on future wins in new technology. Others point to sales drops and tough competition as big risks. Zacks rates Tesla as “sell.” Many analysts warn that hype around tech projects may not offset the recent losses. Investors are being urged to review Tesla’s numbers closely before making new bets.
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