On Monday, I published My Perfect Portfolio – five high-conviction assets (Nvidia, Meta, Uber, Alphabet, and Bitcoin) that I believe have the highest upside over the next 3–5 years.

It’s a list built on strong fundamentals, dominant business models, and reasonable valuations.

A reader asked a fair question: Why isn’t Tesla on the list?

Here’s why: Tesla isn’t just overvalued – it's priced for perfection in a world where reality is catching up fast.

Let’s start with the basics.

Tesla’s first-quarter earnings announced last night were a mess.

Revenue missed. Earnings missed. And the core automotive business (where Tesla still makes almost all of its money) saw revenue plunge 20% year-over-year.

Net income fell 71% and the company gave no 2025 growth outlook, opting instead to “revisit” it later this year. That’s never a good sign.

Sure, management blamed factory upgrades and vehicle refreshes.

But there’s a bigger issue at play: Tesla is rapidly losing pricing power. EV demand is softening. Competition is heating up globally. And Tesla is increasingly using discounts and incentives just to move inventory.

That’s not the playbook of a hyper-growth company. It’s the strategy of a maturing automaker in a crowded market.

Yet Tesla is still priced like it’s something far more than an automaker.

As of today, Tesla trades at a price-to-earnings ratio of 116x.

Meanwhile, General Motors (GM) and Ford (F) trade at 7x earnings…

Investors aren’t valuing Tesla on today’s earnings or even next year’s. They’re betting everything on the promise of robotaxis and humanoid robots (Optimus).

That’s where I take issue.

Because while Tesla’s robotaxi vision sounds revolutionary, it’s still just that – a vision.

Meanwhile, Waymo (owned by Alphabet) vehicles are already operating in the real world today – delivering passengers with no driver.

I’ve taken rides in them here in Austin.

And yet GOOG trades at a lower valuation than Tesla, despite its far broader business and higher profitability.

The current reality for Tesla is that it’s a company seeing declining margins, slowing growth, and intensifying competition, all while its valuation still bakes in moonshot success.

I’m not rooting against Tesla.

I admire Elon Musk’s boldness.

But investing is about probabilities, not personalities.

And based on fundamentals, Tesla just doesn’t belong in a portfolio of the market’s most compelling opportunities right now.

I’ll gladly revisit that if the valuation ever reflects reality.

But for now, I’ll stick with companies like Nvidia, Uber, Alphabet, and Meta – businesses delivering today and building for tomorrow.

Keep the emails coming: AskDavis@paradigmpressgroup.com.