Gary Black Says Tesla's Valuation Is So Stretched That Most Institutional Investors Won't Touch the Stock— and FSD Isn't Helping

Tesla Inc. (NASDAQ: TSLA ) faces institutional avoidance because investors see its stock as too expensive relative to expected profit growth, The Future Fund LLC ’s Gary Black said, arguing that Full Self-Driving advantages alone are not enough to justify the valuation.

Black Flags Tesla’s Stretched Valuation In an X post on Wednesday, Black pointed to Tesla’s 2026 price-to-earnings ratio of 205 times, compared with projected earnings-per-share growth of 35% from 2026 through 2030.

That produces a PEG ratio of 6.0 times, a measure that compares valuation with expected growth. "$TSLA‘s stretched valuation (2026 P/E of 205x vs 2026-2030 eps growth of +35%, PEG 6.0x) and declining forward earnings estimates (2027 EPS est -17% YTD) are why most institutional investors avoid the stock," Black wrote.

Black also posted two charts to support his case.

One showed Tesla’s quarterly and annual earnings-per-share forecasts through 2030, including year-over-year growth rates.

The other showed consensus 2027 adjusted earnings estimates falling steadily over recent months.

FSD Hype Faces Sales Reality "Everyone recognizes the unique technological advantages TSLA FSD has, but most X influencers won’t talk about valuation or why analysts’ estimates keep falling," Black added.

He said those two factors, valuation and negative earnings revisions, explain why Tesla continues to underperform the Nasdaq 100.

Read Also: Tesla Robotaxis Could Be Blocked From New Jersey — And Elon Musk's Own Strategy Is Why Black has also questioned whether FSD is moving the sales needle.

Last week, he said Rivian Automotive Inc. (NASDAQ: RIVN ) rallied after a delivery beat without relying on autonomy hype. "FSD is not driving sales," he said, adding that consumers had "no idea about FSD" or Tesla’s "autonomy efforts." Over the weekend, Black argued Tesla’s second-quarter delivery beat was helped by a war in Iran-driven gas price spike to $3.86 per gallon over the July Fourth weekend, up from $2.98 before the conflict.

He said Tesla shares could still rebound if analysts raise second-quarter and full-year 2026 earnings estimates.

Tesla Adds Model To Refresh Lineup Investor Ross Gerber of Gerber Kawasaki also said Tesla’s post-delivery stock decline refocused attention on challenges, including an aging lineup and falling gas prices.

Tesla is trying to address that lineup issue.

The company recently launched the three-row Model Y L in the U.S. at $61,990, with deliveries expected around September or October, after a strong second-quarter sales boost.

According to Edge Rankings, Tesla stock has excellent Growth and Momentum scores and a satisfactory Quality score.

Price Action: Tesla shares were down 1.77% at $395.76 during pre-market trading on Thursday.

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