Tesla stock has given investors incredible highs and lows over the years. Shares surged to a record $498.83 just a few months ago after trading below $220 following President Donald Trump’s Liberation Daytariff announcementin April 2025. All that volatility may be obscuring the fact that Tesla stock has trailed the S&P 500 over the past five years.
The recent underperformance essentially started in early July. Then, Tesla’s five-year gain slipped to about 70%, edged out by a couple of percentage points by the broader market. Coming into Friday, Tesla stock has gained roughly 50% over the past five years. The S&P 500, excluding dividends, has risen closer to 70%.
Some of the reasons the stock has started to lag aren’t hard to suss out. For starters, there is earnings growth. S&P 500 earnings growth has continued while Tesla’s earnings growth has stalled. Tesla earned north of $4 a share in 2022, up from $2.26 in 2021. Earnings per share in 2026 are expected to be $1.68. (The S&P 500 has grown earnings 11% a year on average for the past five years, according to FactSet)
The electric-vehicles business has become more competitive and growth has slowed. Tesla, however, isn’t really an EV company anymore. It’s pivoted to physical artificial-intelligence applications such as robo-taxis and robots. Both are playing a role in recent underperformance.
Tesla launched a robo-taxi service to much fanfare in June 2025. Expansion has been slow, but that might not be the main reason Tesla shares are stuck, according to Future Fund Active ETF co-founder Gary Black. He believes the robo-taxi business might turn out to be more competitive than EVs. “It’s not that Tesla won’t some day solve for unsupervised [autonomous driving],” says Black. “It’s just that everyone else in the auto business will as well.”
Many companies from Alphabet to Nvidia are working on autonomous driving solutions. Competition could hit market share and profitability goals for CEO Elon Musk’s car company.
The future isn’t certain, but doubt is enough to create a headwind for any stock. Still, the headwind has been a gentle breeze. Tesla shares are valued at about 175 times earnings expected over the coming 12 months, up from about 115 times five years ago.
Tesla also could use a robot breakthrough, or at least tangible progress. Musk believes that AI-trained robotics will be the largest business in human history. Tesla is investing heavily in AI and robot-building capacity. It’s working on the third generation of its humanoid, Optimus. But investors haven’t seen Optimus lately and it’s unclear when Tesla will be ready to sell the bot.
Investors have been waiting for AI to contribute meaningfully to Tesla’s sales and earnings. They have been waiting to bid the stock up too.
Shares were down 0.2% on Friday at $354.06, while the S&P 500 was up 0.5%. Early prices left Tesla stock trailing the index by about 22 percentage points over the past five years.
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