Tesla's $4 Trillion Dream: Can It Overtake NVIDIA? Here's What Investors Need to Know

The race to become the world’s most valuable company has taken a dramatic turn as Tesla CEO Elon Musk vows to surpass NVIDIA’s market cap—and even eclipse the combined worth of the next five largest firms. But with Tesla’s stock price languishing near $275 and its core electric vehicle (EV) business under pressure, is now the time to bet on Musk’s vision? Let’s dissect the data.

Tesla’s Bold Vision: AI, Robots, and Robotaxis

Musk’s ambition hinges on transforming Tesla from an EV maker into a leader in artificial intelligence (AI) and robotics. Key pillars include:1. Cybercab Robotaxis: A planned autonomous ride-sharing service in Austin by June 2025, aiming to capture 99% of the market. Analysts estimate this could generate $84 billion in revenue by 2035.2. Optimus Robots: A humanoid robot designed for industrial and household tasks. Musk forecasts $10 trillion in long-term revenue, while Deutsche Bank sees $10 billion by 2035.3. Full Self-Driving (FSD) Software: A core asset valued at $1.2 trillion by Musk, leveraging Tesla’s vast dataset from over 1.8 million vehicles.

Recent Performance: Stumbles in a Competitive Landscape

Despite Musk’s optimism, Tesla’s stock has been a rollercoaster. Post the November 2024 U.S. elections, shares surged 64%, but by April 2025, they had retreated to around $275—a 7% drop year-to-date. Key challenges include:- EV Sales Decline: Q1 2025 deliveries fell 13% year-over-year, with revenue dropping 20% amid price wars and competition from China’s BYD.- Overvaluation Concerns: Tesla’s P/E ratio of 150 dwarfs peers like NVIDIA (P/E ~38) and Toyota (P/E ~10). To justify this premium, Tesla must deliver on its tech bets.- Execution Risks: Cybercab mass production is delayed to 2026, and Optimus’s 2025 production targets remain uncertain.

Analysts Split on Tesla’s Potential

• Bulls like Ark Invest envision a $24 trillion robotics market, while Morgan Stanley believes Tesla’s robotaxis could generate $120 billion by 2040. They argue Musk’s track record and AI dominance could propel a valuation leap.
• Bears, including Wells Fargo’s Colin Langan, question the feasibility of scaling autonomous systems and robots, noting Tesla’s EV business struggles and regulatory hurdles.

The Bottom Line: A High-Reward, High-Risk Gamble

To overtake NVIDIA’s $2.68 trillion valuation, Tesla must grow its market cap by 230%. Analysts estimate this would require:- $10 trillion in market cap by 2030, driven by robotaxis (20% of revenue by 2030) and Optimus sales.- EV sales stability: Tesla needs to reverse its 1% 2024 revenue decline and maintain margins amid rising competition.

Final Verdict: Proceed with Caution

Tesla’s stock remains a speculative play on Musk’s AI and robotics vision. While the long-term potential is staggering, investors must weigh:- Upside: A $4 trillion valuation could materialize if Cybercab and Optimus succeed, but this requires flawless execution over the next decade.- Downside: Near-term risks include EV market saturation, regulatory delays, and a P/E ratio that demands extraordinary growth to justify.

For now, Tesla’s stock—trading at $275 with a $812 billion market cap—appeals to risk-tolerant investors. However, until autonomous revenue materializes and EV sales stabilize, the jury remains out. As Musk once said, “The future is autonomous.” But for Tesla’s stock, that future still feels distant.

Final Take: Hold off on buying unless you can stomach high volatility. Wait for clearer execution signs—like Cybercab launches and Optimus revenue—before taking a position.