Tesla Stock Is “Overvalued,” Says Renowned Investor Michael Burry
Tesla stock is up today but could be overvalued and ready to crash according to the "Big Short" investor Michael Burry
Quick overview
- Michael Burry, known for predicting the 2008 housing market crash, believes Tesla stock is 'ridiculously overvalued.'
- Burry criticizes Elon Musk's $1 trillion payout plan, suggesting it exacerbates Tesla's valuation issues.
- Despite a recent stock increase, Tesla faces challenges with lower EV sales compared to competitors and concerns over the AI market.
- The company is pivoting towards new ventures like robotaxi services and AI-driven projects to maintain growth.
Back in 2008, Michael Burry predicted the housing market crash, and now he is assessing Tesla (TSLA) stock as “ridiculously overvalued.”
Burry is an investor that other investors look to for market predictions, and he says that Tesla’s market capitalization is not valued at the proper level right now. He also said that Elon Musk’s $1 trillion payout plan is not helping the situation.
Stock for the electronic vehicle manufacturer Tesla is valued at $432 per share, up 0.64% from the previous day. Their stock has been climbing for days, part of a wider market shift, and they even managed to sidestep the Monday decline that swept much of the stock market.
Tesla Performance and Burry’s Prediction
Tesla approved a payment plan for its CEO Musk last month whereby he will receive $1 trillion if he can grow the company substantially and according to fixed goals over the next few years. If Musk can meet those criteria, then the company will make far more than they are paying him.
Musk is betting on himself, and Burry is betting against Tesla. He says that the company issues stock-based compensation for its employees and does not use buybacks to offset. Add that to the Musk payout agreement, and Tesla could be in trouble.
Tesla has had an erratic year, plagued initially by numerous reports that its electric vehicles were selling at a far lower rate than the previous year and lower than its competitors in many markets. The company has managed to turn things around somewhat with the launch of the robotaxi service in Texas and California. They plan to extend their service to other areas very soon.
Tesla has also talked up its new Optimus android, which would serve in the workplace and in the home to perform a variety of tasks. These have gone into early production already, and they utilize the latest in Tesla’s AI programming that is also used in the company’s electric vehicles and in a variety of other applications.
Tesla is one of several major companies that is under pressure right now due to fears over the collapse of the AI market. The company has invested substantially in the technology and is utilizing it with most of its product and service offerings. Despite fears that the AI market will crumble in the near future, Tesla is backing the technology more than ever, and Musk is playing up its role in future Tesla projects.
Tesla stock is up only marginally from its 2025 start of $394 per share. The company did recover from an early stock crash in March and has kept its gains since then. However, with Burry calling the stock overvalued, the company may be headed for another slump.
They have not released a new EV in a while, and that has kept their sales from approaching those of many of their competitors, but Tesla may not need to push that aspect of their business. With the robotaxi service doing well and other ventures in the pipeline, the company may start to shift its focus if it sees that the car sales market is shrinking for them.
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