Tesla, Inc. (NASDAQ:TSLA) shareholders placed their full faith in CEO Elon Musk last week, approving a gargantuan compensation package for the world’s richest man.
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For Tesla bulls, the argument for offering Musk the strongest of incentives to drive the company forward is extremely simple. The CEO is unafraid to offer bold visions for the company in multiple fields, ranging from autonomous driving to humanoid robots.
To date, Musk has succeeded in turning Tesla into one of the Magnificent 7 companies, taking on legacy automakers and helping to pioneer the electric vehicle (EV) industry. Last quarter, Tesla delivered a record number of EVs, though naysayers could point out that a number of these purchases were pulled forward due to the expiration of the $7,500 consumer tax credit at the end of September.
Clearly, TSLA shareholders believe that Musk has what it takes to push the company into the stars, generating trillions of dollars in value in the brave new industries of the future.
However, investor Michael McGrath isn’t buying this narrative.
“Despite repeated delays, broken promises, and shifting timelines, somehow investor enthusiasm for TSLA persists, driven by Musk’s compelling narrative,” says the investor.
McGrath points out that Musk doesn’t exactly have a pristine track record when it comes to his previous promises. For instance, the investor cites Musk’s assertion from the Q2 2025 earnings call in July that Tesla’s robotaxis would cover half the U.S. population by the end of the year – a claim that McGrath deems “simply preposterous.”
“Expanding from the 20 or so robotaxis in Austin to the tens of millions required for half of the population in a few months? And getting regulatory approvals in 30–40 states and hundreds of municipalities in a few months? How do people actually believe this?” wonders McGrath.
Going forward, the investor offers up Musk’s predictions regarding the Optimus robots (e.g. performing advanced surgeries, eliminating poverty) as additional indications of the CEO’s tendency to make claims that are “far-fetched.”
The investor predicts that TSLA’s share price, which currently sits at an elevated Forward GAAP Price-to-Earnings ratio in the mid-300s, is therefore bound to eventually contract.
“If Elon’s strategic vision isn’t right, the stock value will collapse,” concludes the investor. “Don’t be seduced or carried away by the excitement he projects.”
No surprise here, McGrath is therefore rating TSLA a Strong Sell. (To watch Michael McGrath’s track record, click here)
Wall Street is a decidedly mixed bag when it comes to TSLA. With 14 Buys, 10 Holds, and 10 Sells, TSLA carries a consensus Hold (i.e. Neutral) rating. Its 12-month average price target of $382.54 implies a downside of 14%. (See TSLA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.