Should You Buy Tesla While It's Below $500?

Core Viewpoint - Tesla's stock is currently trading 5% below its record high from a year ago, with a market cap close to $1.5 trillion, reflecting significant volatility but also substantial long-term gains for investors [1][2]. Group 1: Stock Performance - Tesla's stock has increased by approximately 105% over the past five years and is nearing its all-time high from last December [2]. - The current stock price is $445.17, with a market cap of $1,462 billion, and a price-to-sales ratio of 17 and a price-to-earnings ratio of 304, indicating it may be overvalued based on traditional metrics [8][9]. Group 2: Business Transformation - Tesla is evolving into a software, robotics, and artificial intelligence company, as envisioned by CEO Elon Musk, which could redefine its business model [4]. - The company has long-term potential with its robotaxi operations, currently in limited markets, aiming for expansion both domestically and internationally [5]. Group 3: Future Opportunities - Humanoid robots present a significant opportunity, with Musk estimating this could elevate Tesla's market cap to $25 trillion, targeting both commercial and consumer markets [6]. - If Tesla's self-driving vehicles and robots succeed, the current stock valuation may appear favorable in hindsight, potentially leading to substantial earnings growth [10]. Group 4: Current Challenges - Tesla's revenue growth has slowed due to increased competition, higher interest rates, and consumer backlash related to Musk's political involvement, with Q3 2025 operating margins dropping to 5.8% from 10.8% year-over-year [7]. - The company's current valuation may already reflect optimistic forecasts, making it a high-risk investment for those considering buying at this time [12].