Will $50,000 Invested in Tesla Stock Today Make You a Millionaire? Elon Musk's Answer May Shock You.

Tesla (TSLA 0.98%) is currently the ninth-largest company in the world, with a market value of $1.4 trillion. But CEO Elon Musk sees physical artificial intelligence (AI) products like autonomous cars and robots as a tremendous growth opportunity.

He argues Optimus, a humanoid robot, could add as much as $25 trillion to the company's market value. And when autonomous driving technology is factored into the equation, Musk thinks Tesla could be a $30 trillion company at some point in the future.

That may surprise some readers because the largest company in the world is currently worth about $4 trillion. But if Musk is correct, the implied upside for Tesla shareholders is more than 2,000%. That means $50,000 invested in the stock today would eventually be worth more than $1 million.

Here's what investors should know about Tesla.

Tesla's electric vehicle business is stalling

Global electric vehicle sales jumped 35% this year through July, but Tesla reported a decline in automotive revenue during the last three quarters. Dwindling demand is partly due to CEO Elon Musk involving himself in politics, which backfired spectacularly, and partly due to competition. Tesla has an expensive lineup of electric vehicles, and more automakers are bringing appealing alternatives to market.

Those dynamics have caused Tesla to lose substantial market share across China, Europe, and the United States. The company accounted for only 12% of global electric vehicle sales through July, down from 17% in the same period last year. Meanwhile, Chinese automakers BYD and Geely have gained market share, and now rank as the top two electric carmakers worldwide in terms of vehicle volume.

Tesla's autonomous ride-sharing and robotics businesses are ramping up

Tesla recently introduced its first commercial autonomous ride-sharing service in Austin, Texas. The company is also testing robotaxis in the San Francisco Bay Area, and recently received approval to start testing in Nevada. While Tesla trails the market leader Alphabet's Waymo, which already operates in five U.S. markets, it theoretically has an advantage.

Tesla's autonomous driving platform relies solely on computer vision. That strategy is not only less costly that the sensor suite (cameras, lidar, radar) used by Waymo and other autonomous driving companies, but also more scalable. Whereas Waymo maps cities in meticulous detail before opening its ride-sharing service to the public, Tesla's vision-only approach makes city maps unnecessary.

Musk says Tesla will eventually hold at least 90% market share in autonomous ride-sharing because its robotaxis are more cost efficient and can be introduced in new cities with more quickly. He said on the second-quarter earnings call that autonomous ride-sharing could have a "material impact on our financials around the end of next year."

Sizing the opportunity is challenging, but most analysts see a large market in the making. Straits Research estimates global ride-sharing sales will surpass $900 billion by 2033. Uber CEO Dana Khosrowshahi says autonomy will unlock a $1 trillion opportunity in the U.S. alone. And Ark Invest says robotaxi revenue will reach $2.6 trillion per year by 2030.

Meanwhile, Tesla is also developing an autonomous humanoid robot called Optimus, which Musk says will eventually be its most valuable product. The company plans to scale production next year and hopes to build at least a million units annually within five years. However, Tesla faces a great deal of competition in that market, especially from Chinese companies.

"China has a commanding lead in physical AI," writes Morgan Stanley analysts. But the humanoid market will be large enough to support multiple winners. Global wages total approximately $30 trillion annually, and humanoid robots could curb some of that spending through automation. Morgan Stanley estimates humanoid robot sales will increase at 34% annually to reach $4.7 trillion by 2050.

Tesla is one of the most expensive stocks in the S&P 500

Valuing Tesla is difficult because the electric car business, which currently accounts for three-quarters of total revenue, has lost momentum. The company has pivoted toward AI products, but neither autonomous ride-sharing nor humanoid robots are a material source of revenue today. That means earnings are likely to grow slowly in the near term, but could accelerate a few years out.

Nevertheless, investors should be aware of the current facts and figures. Tesla shares trade at 169 times 2026 earnings, which makes it the third-most expensive stock in the S&P 500. That valuation multiple is particularly pricey for a company whose earnings are forecast to grow at just 19% annually in the next three years.

Here's the bottom line: Tesla's current valuation is unsustainable if the company fails to capitalize on opportunities in robotaxis and robotics. Investors who lack confidence in those endeavors should avoid the stock. But investors who think Tesla can disrupt the mobility and labor markets should own the stock, though I would keep my position small.