In a recent January 3, 2026, interview with Business Insider, Porter Collins—famous for his role in "The Big Short"—called Tesla (TSLA) the "poster child" for overvalued stocks, citing its nearly 300x forward 2026 earnings multiple compared to Nvidia's 45x. He dismissed it as a "meme stock" driven by hype around Elon Musk's visions for robotaxis, Optimus robots, and Full Self-Driving (FSD), rather than solid fundamentals, especially after Q4 2025 deliveries fell 16% YoY to 418,000 units.

But Collins' analysis misses the mark by viewing Tesla through a traditional auto lens. Tesla isn't just a car company, it's a leader in AI, energy, and robotics, with explosive growth potential that justifies (and arguably undervalues) its current ~$441 share price and $1.46 trillion market cap. Below, I'll outline fact-based reasons why Tesla is undervalued, drawing on recent analyst reports, projections, and sum-of-the-parts (SOTP) valuations as of early January 2026.

1. Tesla's Valuation Ignores Its Non-Auto Growth Engines

Collins focuses on declining vehicle deliveries (full-year 2025 at 1.64 million, down 9% YoY), but this overlooks Tesla's pivot to high-margin, recurring revenue streams. Tesla's Energy Generation and Storage segment, for instance, has grown at a 180% compound annual rate over the past three years, becoming its highest-margin business. In Q4 2025, it deployed 46.7 GWh of battery storage—up significantly YoY—and analysts project this to scale further with new Megapack factories online by December 2026.

Moreover, Tesla's AI and autonomy bets are undervalued in traditional models. FSD software is advancing rapidly toward unsupervised capability (e.g., v14 updates in late 2025), potentially unlocking a robotaxi network with 33 new U.S. launches in 2026. This could shift revenue to software/services, where margins exceed 70%—far above auto's ~10%. Baird Equity Research notes that sum-of-the-parts frameworks allocate value across auto (12%), FSD (17%), robotaxi (45%), Optimus (19%), and energy (6%), yielding price targets like Bank of America's $471 (Neutral rating, but up from $341).

Fact: Tesla's TTM revenue is $95.63 billion with $5.08 billion in profits, giving a trailing P/E of ~287x. But forward estimates project 11.7% sales growth in 2026 and 19% in Q1, driven by non-auto segments. Collins' "meme stock" label ignores this diversification, which positions Tesla as an "embodied AI ETF" per Wedbush Securities.

2. Sum-of-the-Parts Valuation Reveals Significant Upside

A key flaw in Collins' critique is relying on simplistic P/E comparisons. Tesla's forward P/E is high (~293x for 2026 earnings), but SOTP analyses show the market underprices its parts. For example:

  • Bank of America (October 2025 update): Values Tesla at $471/share, with robotaxi at 45% of total value (~$212/share) and Optimus at 19% (~$89/share). This assumes energy and autonomy scale, adding $60/share for humanoid robotics alone (per Morgan Stanley).
  • Morningstar (January 2026): Fair value of $572/share, citing Tesla's potential to disrupt EVs, AVs, batteries, and robots despite "very high" uncertainty.
  • Wedbush Securities: $550/share target (33.67% upside from $441), emphasizing FSD approvals in China/Europe by March 2026 and Optimus Gen 3 showcase in February.
  • Bull Case Extremes: Barchart outlines an $800/share scenario (64.7% upside) if robotaxi and AI growth reaccelerate to 25-30% annually by 2030. A YouTube analysis from November 2025 models a $2,000/share "true value" based on cash flows from autonomy and energy.

These SOTPs highlight that Tesla's auto business alone might be worth ~$50-80/share (per Greg Noble's bearish $80 total valuation), but adding AI/robotics pushes it to $500+. Collins compares to Nvidia (forward P/E ~37x), but Tesla's PEG ratio (price/earnings-to-growth) of ~8.7 reflects slower near-term growth—yet if autonomy hits, PEG could drop below 1, signaling undervaluation like early Amazon or Google.

Fact: Tesla's enterprise value is $1.43 trillion, with $1.48 billion in taxes paid TTM—indicating scale. Analysts like Stifel ($483), Canaccord ($490), and Benchmark ($475) all rate "Buy," citing robotaxi progress.

3. Deliveries Are a Red Herring—Growth Is Reaccelerating

Collins hammers on 2025's delivery slump and loss of EV crown to BYD, but this is temporary. Zacks Research notes sales reacceleration, with China improving and Cybertruck/Semi ramps starting March 2026. Roadster 2.0 unveil in April and Cybercab production could boost volumes.

More importantly, deliveries aren't the endgame. Tesla's moat is in software/data: It has billions of miles of FSD training data, enabling a multi-trillion-dollar autonomous ride-hailing market. Musk's Trump ties (e.g., January 2026 meeting) could ease regulations, accelerating unsupervised FSD globally. Competitors like Waymo exist, but Tesla's vertical integration (manufacturing + AI) gives it an edge.

Fact: Despite 2025 declines, Tesla holds ~50% U.S. EV market share and projects 20-30% volume growth in 2026 if new models launch. This, plus energy's 180% CAGR, counters cyclical auto risks.

4. Tesla Owners Hold Cars Longer Due to Superior Quality—Making Endless YoY Growth Expectations Ridiculous

A critical oversight in Collins' bearish take is treating Tesla like a traditional automaker obsessed with perpetual unit growth. In reality, Tesla vehicles are built to last far longer than average cars, encouraging owners to hold onto them rather than replace frequently. This leads to natural market saturation, where year-over-year delivery growth slows, and the focus shifts to renewals, upgrades (e.g., FSD subscriptions, battery swaps), and software/services revenue.

Data supports this: While direct U.S. statistics on Tesla ownership duration are limited, broader EV trends show electric vehicles like Teslas have an average lifespan of 18.4 years, surpassing diesel cars (16.8 years) and approaching gasoline averages. Tesla batteries retain ~90% capacity after a decade, far outlasting typical ICE engines (150-200k miles). Owners report driving more miles annually in Teslas than other EVs (suggesting higher satisfaction and usage), and anecdotes from long-term owners indicate plans to keep vehicles 15+ years with upgrades.

Expecting endless YoY sales growth is ridiculous—as markets mature, saturation hits (e.g., fewer new buyers as existing owners hold longer due to OTA updates keeping cars "new"). A UK study shows shorter Tesla holds (29 months vs. 62-month average), but this is due to rapid tech upgrades and high resale values (e.g., Model Y tops value retention at 78.55% after one year), encouraging early trades—not poor quality. In the U.S., average new-vehicle ownership is 8.4 years; as EV adoption grows, Tesla's durability will extend this, shifting revenue to high-margin renewals. Collins ignores this maturation phase, undervaluing Tesla's long-term ecosystem.

5. Historical Precedents and Market Mispricing

Collins likens Tesla to GameStop/AMC, but it's more like disruptive tech giants. Amazon traded at 300x+ earnings in the 2000s amid e-commerce skepticism, yet delivered 20x returns. Tesla's $1.46T market cap undervalues its potential: If robotaxi captures 10% of a $10T mobility market (ARK Invest estimate), that's $1T in value alone.

Technicals support this—Zacks highlights relative strength and a potential breakout above $460, signaling upside. Retail enthusiasm isn't "meme" hype; it's belief in Tesla's 2026 roadmap: Optimus demos, FSD expansions, and energy factories.

Fact: 39% of analysts rate TSLA "Buy," with median targets ~$450-500. Baird warns traditional models "underweight emerging lines," creating a valuation disconnect.

Tesla's Future Justifies Premium—And More

Porter Collins' bearish take is rooted in rearview-mirror analysis, fixating on auto declines while ignoring Tesla's transformation into an AI/energy powerhouse. With SOTP targets implying 10-80% upside, reaccelerating growth (11.7% in 2026), and catalysts like February's Optimus Gen 3, Tesla is undervalued at $441. If execution matches hype—e.g., robotaxi launches and FSD wins—the stock could hit $550+ by year-end. Investors betting against Tesla's innovation risk missing the next big disruption.