Tesla Inc. (TSLA) continues to capture investor attention with its high-profile ambitions and volatile stock performance. The company, led by CEO Elon Musk, is making significant investments in both the autonomous vehicle and robotics sectors—industries that analysts project could be worth trillions of dollars by 2030. However, these efforts come as Tesla’s core profitability faces mounting pressure, raising questions about its prospects for long-term wealth generation for today’s investors.
Ambitious Targets Amid Shrinking Margins
Once a market darling, Tesla's past record of explosive gains has tempted many to believe the company will continue to mint new millionaires. Nevertheless, the most recent financial results paint a complex picture. According to reporting from Yahoo Finance, in the third quarter, Tesla’s earnings per share fell to $0.66. Meanwhile, its operating margin dropped sharply from 17.2% to 7.6% year-over-year. The company continues to ramp up investments, with research and development costs rising 58% in the most recent quarter, reaching $1.16 billion. These expenses are critical if Tesla is to realize its ambitious plans—including the rollout of its third-generation humanoid robot, Optimus, and autonomous ride-hailing services targeting eight to ten cities by year’s end—but they compound pressure on profitability.
Adding to investor caution, a recent temporary boost in vehicle sales, driven by customer interest in tax credits, has faded. The overall electric vehicle market now faces greater competitive and regulatory headwinds, further complicating Tesla's path forward.
Historic Compensation Package for Elon Musk
On November 6, 2025, Tesla shareholders approved a historic compensation package for CEO Elon Musk. This package is potentially worth $1 trillion over ten years, tied to aggressive milestones such as an $8.5 trillion market capitalization and annual delivery of 20 million vehicles. The move, reported by MoneyWeek, is seen by some as crucial for maintaining Musk's leadership and vision, particularly as Tesla pivots towards artificial intelligence and robotics.
However, the package drew opposition from several major investors and advisory firms. Norway’s sovereign wealth fund, Institutional Shareholder Services (ISS), and Glass Lewis voiced concerns about the size of the compensation and a lack of future risk mitigation. Despite these qualms, Tesla's market capitalization has rebounded to nearly $1.5 trillion, although critics highlight an elevated price-to-earnings ratio—in excess of 300—and reduced short-term earnings outlook.
Analyst Opinions Diverge
The investment community remains divided about Tesla’s prospects. Analysts at Morgan Stanley, led by Adam Jonas, recently reinstated Tesla as their top U.S. automotive pick, citing the company’s expansion into artificial intelligence and robotics as major potential growth drivers. Jonas maintained a $430 price target, signaling optimism about Tesla’s ability to diversify and innovate beyond traditional car manufacturing—this even after a 45% drop in European sales in January.
Conversely, J.P. Morgan has taken a more cautious stance, lowering its price target for Tesla shares from $135 to $120. The brokerage expects Tesla to post a second consecutive year of declining deliveries, forecasting 2025 shipments at about 1.78 million vehicles, slightly down on 2024. J.P. Morgan cited mounting public skepticism: consumers in some markets are boycotting Tesla, resale values are under pressure, and protests—such as the "Tesla Takedown" demonstrations—have erupted, some in response to broader controversies involving CEO Elon Musk. U.S. President Donald Trump has condemned incidents of violence against Tesla dealerships, describing them as domestic terrorism. After a sharp fall following all-time stock highs in December, Tesla shares have partially recovered, recently rebounding by 10% after a significant one-day drop. The median analyst target for the stock stands at $370 per share. (Sources: Reuters; Reuters)
Trading at High Valuations
As of November 17, 2025, Tesla stock was trading at $404.35—a 0.57% increase from the prior close. On that trading day, the stock's intraday high was $411.98 and its low was $381.15, with a substantial trading volume of 105,506,682 shares. The current valuation remains far above the broader market average in terms of price-to-earnings ratio, underscoring the high expectations embedded in the stock price.
Risks and Bigger Picture for Investors
Recent developments highlight both the opportunities and risks of investing in Tesla. On one hand, the company’s innovation engine—powered by new investments in AI and robotics—offers a glimpse of future growth possibilities. On the other, declining profitability, contentious leadership compensation packages, and mixed analyst sentiment point to significant uncertainty. As history suggests, the path to achieving ambitious, futuristic goals often takes longer and proves more expensive than initially anticipated, with no guarantee of success.
For today’s investors considering whether buying Tesla stock could “set them up for life,” the current risks and valuation suggest a cautious approach. While the company’s growth story is far from over, the easy gains of the past seem less likely to be repeated in the near to medium term.
Disclosure: The author does not hold a position in Tesla or other companies mentioned. The original article appeared on Yahoo Finance.