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.