Steve Eisman, the legendary investor portrayed in "The Big Short," has raised concerns about Tesla's current stock valuation, according to Electrek.
Eisman owns nearly all of the "Magnificent 7" tech stocks except one: the electric vehicle automaker helmed by Elon Musk. His reasoning centers on a disconnect between the company's financial performance and its stock price, which he attributes to what he calls cult-like investor behavior.
What's happening?
Eisman recently pointed out on the "Lemonade Stand" podcast that Tesla's earnings have dropped sharply since their 2023 peak of $4.30 per share. The company earned approximately $2 per share in 2024, and Eisman predicts around $1.50 per share for 2025 — a decline of around 65% over three years.
Despite its earnings collapse, Tesla's stock price has remained around 50% higher than it was during the automaker's peak earnings period.
"It's a cult," Eisman told the podcast about why traditional investment analysis doesn't apply to the company.
He also noted that Tesla shareholders believe the company will succeed in its future ventures, such as Robotaxis and artificial intelligence. "No. 1, [Dan Ives, a financial analyst] could be right," Eisman said, per Electrek. "Secondly, there's no argument against it. You're arguing against something that'll happen in the future, and people believe it or not."
Why are Eisman's claims important?
The situation highlights a broader problem in the marketplace where stock valuations have become disconnected from actual company performance. Eisman once famously stated that "making investment decisions by looking solely at the fundamentals of individual companies is no longer a viable investment philosophy," suggesting that speculation now drives prices more than financial results.
For Tesla customers — and potential electric vehicle buyers — this disconnect could have startling consequences. The automaker has faced several challenges throughout 2025, including price increases that made EVs less accessible and production delays that left customers waiting.
When a company's stock price is driven by speculation rather than performance, it could prioritize projects that excite investors over practical, everyday improvements that benefit customers. That's bad news for consumers and the environment alike, as EVs have been shown to improve our air quality and public health.
What's being done about Tesla's valuations?
Investors such as Eisman are making their concerns public, encouraging more realistic assessments of company performance. For shoppers interested in electric vehicles, exploring alternatives to Tesla can support the broader EV market and potentially unearth better value, with companies like Rivian, Ford, and Hyundai expanding their EV offerings.
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