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Tesla Inc. (NASDAQ: TSLA) stock recently reached an all-time high. After wavering earlier this year, it is up 120% over the past five years. That compares to the S&P 500’s gain of 87% in that time. This is despite slow sales, battles over CEO Elon Musk’s pay package, electric vehicle (EV) competition, and safety concerns about some of its models. Investors still believe Tesla’s future is as something more than a car company. In fact, much of the five-year increase happened in the second half of 2025.
There is only one explanation for the success of the shares. People and institutions that own the stock believe that Musk’s vision of a future in which its primary businesses are fully self-driving cars and robotics will make it a global artificial intelligence (AI) leader.
Musk has made believers of what must be tens of thousands of shareholders with his story that there will be 40 million human-like robots in 2040. The price of these could be less than $20,000. That makes it hard to see how these could be affordable in the world’s poor countries.
While Tesla has many competitors in the autonomous car business, Musk says it will be the worldwide leader. That means his service will need to be better than several in the United States, including Alphabet’s Waymo. The New York Times recently reported, “Shares of Tesla have hit new highs on optimism about the company’s self-driving taxis. But experts say Tesla is far behind Waymo, which has a big head start.” Several tech and car companies in China also say they have a head start.
Most car industry experts do believe self-driving cars are the future of the auto and trucking sectors. How soon and who wins are part of an ongoing debate that will be settled by the market share of the companies already far along in the business.
Often missing in the debate is that some legacy car company stocks have done nearly as well as Tesla over the past five years. General Motors Co. (NYSE: GM) stock is up by 102%. Maybe just being a car company is enough to have a strong share price performance.