From Fortune:

Tesla Inc. is facing some trouble on Wall Street, with its stock down 22% to start 2024 compared to other tech companies. While Elon Musk positions the company as an AI investment, others see it as a fading product. Analysts have cut Tesla’s 2024 profit estimate nearly in half, raising doubts about the company’s future growth.

The electric-vehicle maker faces challenges as demand for EVs is expected to slow in 2024. Analysts recommend Tesla shares at a much lower rate than the rest of the Magnificent Seven. With Tesla being a one-product company, it’s losing traction compared to other companies who have shown how AI drives real business growth.

Despite being the only profitable, large-scale EV maker, Tesla’s slowing demand and shaky AI credentials are contributing to a struggle with its sky-high valuation. The company’s main product, the Model Y, is the only significant contributor to revenue. This, in turn, is making it difficult for investors to swallow their high valuation.

Despite Tesla’s unique position as a profitable, large-scale, pure-play EV maker, challenges remain. Industry experts widely expect electric cars to take over but have varying timelines for the transition. Tesla stock has seen wild swings over the past few years, and its future remains an “all-or-nothing” bet for the stock market.

Tesla continues to hold a noteworthy future position among the Magnificent Seven as a leader in the electric vehicle market. Despite its riskier nature and the complications surrounding the technology of self-driving cars, Tesla’s revenue growth and earnings projections indicate a more robust position in the future than most other mega-caps.



Read more: Does Tesla still belong in Magnificent Seven?