Below $400 Again, Is Tesla Stock a Buy?

The Motley Fool

by newsfeedback@fool.com (Daniel Sparks)

February 24, 2026

AI-Generated Deep Dive Summary

Tesla’s stock has dropped below $400, marking a significant decline of about 12% year-to-date despite the company’s aggressive push into high-growth areas like Robotaxi, AI, and a shift toward software-driven services. While these initiatives hold promise for future profitability, investors are now grappling with whether Tesla’s current valuation reflects the potential return on these ventures. The article highlights that Tesla is betting heavily on autonomous driving and robotics to drive long-term growth. The introduction of its Cybercab robotaxi concept and advancements in AI underscore the company’s commitment to diversifying beyond traditional automotive manufacturing. However, the challenge lies in determining whether these higher-margin initiatives will materialize quickly enough to justify the stock’s current price. Investors are also weighing the risks and rewards of Tesla’s strategic pivot. While the shift toward software and services could position the company for sustained growth, questions remain about the scalability and profitability of these new ventures. The article emphasizes that while promising innovations like Robotaxi could become major revenue streams in the long term, their impact on Tesla’s bottom line may not be immediate. For finance enthusiasts and investors, this situation raises important considerations. Tesla’s stock decline creates an opportunity to assess whether the company’s valuation aligns with its growth potential. While the shift toward software-driven models is seen as a positive step, the execution of these initiatives and their ability to generate consistent returns will be critical in determining the stock’s long-term trajectory. In summary, while Tesla’s focus on autonomy and new business models presents exciting opportunities, the timing and scale of their impact on profitability remain uncertain. Investors must evaluate whether the company’s current valuation accurately reflects these uncertainties or if it represents a buying opportunity for those willing to take on the risk.

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Originally published on The Motley Fool on 2/24/2026