Buy Tesla Shares

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Buy Tesla Shares

Is It Time To Buy Tesla Shares At A Discount?

Investors usually take extreme volatility as a sign to buy Tesla stock. At least, that's what history tells us when we look at the Tesla stock chart. For example, buying Tesla shares in early 2023 would have led to 4x gains in 2026.

Extreme volatility is actually a key part of the Tesla stock price. So, the fact that Tesla stock is trading at a 30-35% discount from its recent high can be viewed as a bargain.

Tesla Has High P/E Ratio

But should you really take this opportunity to buy Tesla stock at a discount? Or is Tesla stock still overpriced and just trading on pure hype? To answer it, we must take a closer look at Tesla.

At first glance, Tesla looks like a highly overpriced stock with an obscene valuation. For starters, Tesla's earnings in the last financial year were only $4 billion.Meanwhile, its market cap is above $1 trillion.

Even now, Tesla's P/E ratio is above 300. This clearly shows that Tesla stock is running more on hype and hopes rather than fundamentals.

For example, the P/E ratio of Palantir stock is only 130. Even though Palantir is an AI stock and makes more money than Tesla. This clearly highlights the valuation problem of Tesla.

On the other hand, a high P/E also means investors expect strong growth in Tesla. But when it will come and whether it will become a reality remains to be seen.

A closer look at Tesla shows it is involved in a lot of things. The main business of Tesla is still EVs. But it is also working on humanoid robots, solar panels, the Megaback battery storage system, and so on. All of these avenues can provide strong future growth.

The most promising thing that Tesla is working on is self-driving cars or Robotaxis. This could change things and skyrocket Tesla's revenue.

With all things considered, Tesla stock is only worth it if you are willing to take the risk. If you are risk-averse, you can look at other companies in the US stock market.

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