Tesla Stock Movement & Autonomous Driving Debate: Analysis of Melius 'Must Own' Call and Bearish Sentiment

On November 24, 2025, Tesla (TSLA) stock reacted to a Yahoo News article where Melius Research labeled it a “must own” due to Full Self-Driving (FSD) progress and Elon Musk’s AI chip updates [1]. The article cited Melius analyst Rob Wertheimer’s note highlighting Tesla’s FSD v14.1.7 and in-house chipmaking as key catalysts [1]. Concurrently, Reddit users expressed bearish views: FSD is overhyped vs Waymo, financial performance is declining, the stock jump is dubious, and investors are buying repetitive positive narratives [4].

Market impact shows Tesla’s stock rose 3.88% on November 24, followed by 1.20% on November 25 and 0.62% on November 26, totaling ~5.7% over three days [0]. The Technology sector (TSLA’s primary sector) was up 0.149% on the latest date [0]. Financial metrics from Q3 2025 include $28.1B revenue (29% YoY growth) and a 259x P/E ratio [0]. Autonomous driving data reveals Tesla’s FSD has 2.9M miles between major collisions vs Waymo’s 88% fewer serious injury crashes over 71M miles [2].

1. Cross-Domain Catalysts
   : Tesla’s vertical integration (FSD + AI chips + manufacturing) is a core bull case, but Waymo’s superior safety record and commercial deployment challenge its autonomous driving leadership [1][2].
2. Valuation vs Growth
   : The 259x P/E ratio reflects high growth expectations from robotaxi and Optimus, but bearish sentiment questions sustainability without near-term profitability gains [0][4].
3. Sentiment Divide
   : Bulls focus on long-term tech catalysts, while bears emphasize current quality issues (door handle defects [3]) and governance concerns (Musk’s voting control comments [0]).

1. Valuation Risk
   : Tesla’s 259x P/E ratio exposes investors to potential correction if growth expectations are unmet [0].
2. Quality Concerns
   : Rising complaints about door handles and storage issues could erode brand loyalty [3].
3. Competition
   : Waymo’s safety data and broader commercial deployment pose a threat [2].
4. Governance
   : Musk’s comments on needing voting control for “robot army” raise governance questions [0].

• Long-Term Catalysts
  : Robotaxi and Optimus could unlock trillions in value if commercialized successfully [1][0].
• AI Chip Leadership
  : In-house chipmaking may create a moat in autonomous driving and AI [1].

Tesla’s stock rose ~5.7% post-Melius call, with FSD and AI chips as key catalysts. Financials show 29% YoY revenue growth but a high 259x P/E. Bearish views center on FSD overhype, quality issues, and valuation. Investors should monitor FSD adoption, robotaxi launch timelines, and AI chip production progress.