Tesla and Meta Are Worth Almost the Same. Which Stock Is the Better Buy?

Tesla (NASDAQ: TSLA) and Meta Platforms (NASDAQ: META) are two of the stock market's largest technology companies, with similar-sized market caps of roughly $1.5 trillion and $1.7 trillion, respectively. Their high-profile CEOs, Elon Musk and Mark Zuckerberg, make both companies must-watch stories, especially as they stake their futures on artificial intelligence (AI).

That's where the similarities end. For Tesla, AI is the key to unlocking ambitious growth potential in autonomous vehicles and humanoid robotics. Meta is fusing AI into its DNA and building sprawling AI data centers. But right now, the key difference between these companies lies in the underlying businesses that drive them.

Here's why investors should opt for Meta Platforms over Tesla right now.

Image source: Getty Images.

Tesla's transformation has a long road ahead

Elon Musk is building Tesla around self-driving vehicles and humanoid robotics. Tesla launched Robotaxi, a ride-hailing service with self-driving vehicles, last year. The company is also developing Optimus, a humanoid robot that can serve as a robotic worker for enterprises and consumers. Musk believes that these two businesses can turn Tesla into a $25 trillion company and recently discontinued the Model S and Model X electric vehicles to focus on those goals.

However, Robotaxi is only operating in a few cities, and Optimus might not even go on sale until the end of next year. It might take years for Robotaxi and Optimus to make a significant difference for Tesla, which still relies on EV sales for most of its revenue. Automotive manufacturing is a capital-intensive, low-margin business. As a result, Tesla trades at an eye-popping 190 times its 2026 earnings estimates.

Meta's AI tailwinds are already palpable

Social media giant Meta Platforms makes its money from advertising to the 3.56 billion people who use Facebook, Instagram, WhatsApp, and Threads each day. Meta is using AI to automate and optimize ads, and is enjoying tangible benefits. Meta's constant-currency revenue growth accelerated to 29% in the first quarter, up from 19% in the first quarter of 2025.

Zuckerberg has outlined plans to continue building data centers for years to come. Meta is guiding for capital expenditures of up to $145 billion this year alone. The company could begin selling data center capacity to help monetize these investments, but that's an entirely new market for Meta, and the pressure will remain to justify this spending. The concerns have dragged on the stock, which currently trades at 20 times 2026 earnings estimates.

A better business today, and at a much better valuation

Ultimately, Meta has a much higher floor than Tesla. If Mark Zuckerberg is right about Meta's AI plans, those investments could generate earnings for the foreseeable future. If things don't work out and Meta has to abandon that plan, investors still have a remarkably profitable and growing core business that should continue to drive earnings growth and spit out cash.

Investors might be waiting a while for Tesla to realize its potential and justify that high valuation. There's no guarantee that Tesla ever will, and the remaining core business just isn't nearly as compelling. That makes it difficult to justify buying Tesla over Meta at their respective valuations.

Justin Pope has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms and Tesla. The Motley Fool has a disclosure policy.