Tesla, Inc. (TSLA): A Bull Case Theory

We came across a bullish thesis on Tesla, Inc.  on Investment Ideas by Antonio’s Substack by Antonio Linares. In this article, we will summarize the bulls’ thesis on TSLA. Tesla, Inc. 's share was trading at $323.90 as of August 20^th. TSLA’s trailing and forward P/E were 192.80 and 175.44 respectively according to Yahoo Finance.

Tesla’s Q2 2025 earnings highlight a company in transition, where short-term financial stagnation masks the potential of a much larger structural opportunity. Revenue and cash from operations have been largely flat since late 2022, yet this is less relevant if Tesla succeeds in becoming the dominant Physical AI platform. The strategy hinges on putting the most cars on the road, thereby collecting unmatched data to train the leading Physical AI model.

Tesla’s Robotaxi program, now surpassing 7,000 miles of operations in Austin, has become the company’s top KPI, signaling the importance of autonomy over near-term profits. While the repeal of the $7,500 IRA EV credit will pressure growth in the coming quarters, deliveries rose 14% year-over-year and automotive revenue increased 19%, supported by strong demand for the new Model Y. Looking ahead, the launch of new affordable Tesla models by Q4 2025 should accelerate adoption, echoing the efficiency gains last seen in 2020 that transformed Tesla into a free cash flow powerhouse. Elevated CapEx has pressured operating cash flow, but this investment is necessary to scale new models and drive the Physical AI opportunity.

With $36 billion in cash against $13 billion in debt, Tesla retains financial flexibility to weather near-term challenges while pursuing long-term autonomy leadership. Ultimately, the thesis rests on whether Tesla expands Robotaxi operations and executes on new models, both of which could unlock a step-change in value. As Elon Musk noted, Tesla is moving from a pre-autonomy world to a post-autonomy one, positioning the company for a potentially massive revaluation.

Previously we covered a bullish thesis on Tesla, Inc. (TSLA) by Oliver | MMMT Wealth in April 2025, which highlighted weak deliveries, margin compression, and lack of FSD revenue while focusing on Tesla’s long-term AI and autonomy ambitions. The stock has appreciated ~38% since then as autonomy gains traction. Antonio Linares shares a similar view but emphasizes Robotaxi expansion and affordable model launches.

Tesla, Inc.  is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 104 hedge fund portfolios held TSLA at the end of the first quarter which was 126 in the previous quarter. While we acknowledge the potential of TSLA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.