Quick reading
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Tesla (TSLA) is trading at extremely tight valuations despite falling revenues, collapsing net income by almost 50%, and deliveries growth of just 6%. Stellantis (STLA) has been maligned as a weak automotive sector, but there are many reasons to believe otherwise.
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Tesla’s valuation is based on robotaxi and Optimus is promising with prediction markets assigning just a 10.5% chance to a California launch before June 30, while Stellantis has executed a clean shift that resets strategy around customer demand in electric, hybrid and internal combustion vehicles.
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tesla (NASDAQ:TSLA) is once again dominating all financial sources after a 15.22% one-month drop to $433.59, driven by the same robotaxi and Optimus narrative that has driven the stock for years. But this is what you should really be seeing.
Tesla’s history has a quality problem
Tesla trades at a trailing P/E of about 391 and a forward P/E of 204, with an EV/EBITDA of 130. If you leave the narrative aside, what you’re paying for is deteriorating. Full-year 2025 revenue declined 2.93%, net income plummeted 46.79%, and operating income fell 38.45%. Operating income fell 40.23% year-over-year in the third quarter of 2025 and 42.49% in the second quarter of 2025.
Q1 2026 “momentum” ($0.41 EPS vs. $0.3592) was supported by one-time guarantees and tariff-related gains, a $900 million currency tailwind, and $380 million in non-breakthrough regulatory credits. Vehicle deliveries grew just 6%, energy storage revenue fell 12%, and research and development increased to $1.95 billion to fund AI promises before generating revenue. Prediction markets put the odds of a robotaxi launch in California by June 30 at 10.5% and an Optimus launch by the end of the year at 13.5%. That’s the math behind a market capitalization of $1.628 trillion.
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The opposite case: Stellantis
stellantis (NYSE:STLA) is the opposing automaker. At $7.81 per share and a market cap of $22.05 billion, the parent of Jeep, Ram, Dodge, Chrysler, Fiat, Peugeot and Maserati trades at a forward P/E of 9 and a price-to-book below 1. Here’s why the setup deserves a closer look.
1) A balance sheet strength greater than market capitalization. Stellantis ended the first quarter of 2026 with $37.37 billion in cash and equivalents, well above total equity value. The board authorized a buyback of up to 10% of the issued ordinary shares over an 18-month period at the Annual General Meeting on April 14, 2026, and management issued up to €5 billion in hybrid bonds to bolster liquidity.