Tesla is overvalued; $18-19B operating cash flow doesn't support $1T cap, $26B capex exceeds it, and 192x forward P/E is unjustified by slowing growth and falling margins.

Finally, let's talk about a company that invests heavily in artificial intelligence while its business continues to decline. If we go back to 2022, we recall when Tesla was expecting 50% annual growth and a 25% gross profit on all the cars it sells.

That seemed reasonable at the time, but remember that the automotive sector is essentially a commodity sector. Once they came to this realization in 2023, their revenues remained almost constant for 3 years.

Look what happened to the growth rate, okay? It has fallen into single digits , even going negative in 2025, and has risen slightly here, but their operating profits have declined.

Tesla's profits, and more importantly, its operating profit margin, have fallen sharply. The operating profit margin was only 4.2% over the past twelve months. This is the expected margin level from a car manufacturer.

Ultimately, Tesla is a car manufacturing company.

It is true that Tesla has cash flows from its operations, which is shown in yellow here, i.e., positive operating cash flow . I don't believe that $18 or $19 billion in operating cash flow justifies a $1 trillion valuation.

But look at what is expected to happen over the next two years: capital expenditures. Remember that Tesla is not only developing its capabilities in the field of the Optimus humanoid robot, but is working on it now, and is also developing an artificial intelligence infrastructure .

The company buys huge quantities of graphics processing units (GPUs) and builds its own data centers . This will be shown in the free cash flow statement. Therefore, capital expenditures are expected to reach $26 billion this year .

More than what they generate in operating cash flow.

Again, it is difficult to predict what we will spend in the future. The market expects a slight slowdown in this spending. I don't think this is likely to happen. When we look at Tesla's valuation and company performance, does this company deserve to have its shares trading at 13 times sales?

Remember that revenue growth has slowed considerably in the last few years . Profit margins have started to decline. The price-to-earnings multiple, even on a forward-looking, and most generous, basis, is 192.

If we go through a kind of market downturn where the market is saying, "You know what? There isn't enough growth here." Not only in the economy in general, but also in the field of artificial intelligence.

What types of companies are overvalued? Tesla certainly falls into this category. For this reason, if you invest in Tesla and make a profit, the stock price, by the way, has fallen by about 18-19% over the past year.

So, the market began to wonder what Elon Musk would do in the future. Remember that Musk is focusing on two companies. SpaceX is a public company, where it owns a larger share, and that is where it focuses its efforts. As for Tesla, its position has declined.

Among the companies that appear to be overvalued in this context are Oracle, Korwef, Micron, Amazon, and Tesla. I believe all these stocks are