Prediction: Tesla Stock Will Plunge to $100 If the Nasdaq Enters a Bear Market

The Nasdaq-100 index is made up of the 100 most valuable companies listed on the Nasdaq stock exchange, excluding banks and financial institutions. It's often used as a barometer for the performance of the technology sector, which accounts for over half its total value.

The Nasdaq-100 is currently down 8% from its recent peak, and if the decline extends to 20%, it will constitute a technical bear market. The index last traded in bear territory during 2022 and 2023, which sent shares of Tesla (NASDAQ: TSLA) tumbling by 75% to just $100. The electric vehicle (EV) giant is at a disadvantage yet again, after reporting a disappointing set of operating results for the second quarter of 2026.

Tesla stock traded as high as $498 last year, but it has since declined to $310 as I write this. Here's why I predict it will revisit $100 if the Nasdaq-100 enters another bear market.

Image source: Tesla.

The EV business is slowly recovering

Tesla is coming off two straight annual declines in its EV sales, but the tide appears to be turning in 2026. The company delivered 358,023 cars during the first quarter of 2026, which was up 6% from the year-ago period. That growth rate accelerated to 25% in Q2 with 480,126 deliveries.

EV sales still account for over 70% of Tesla's total revenue, so growth in this part of the business is critical to the company's overall financial performance. Unfortunately, the average selling price of each vehicle declined during Q2, resulting in a lower gross profit margin and an 18% decline in adjusted earnings per share. It appears Tesla is cutting prices for its EV lineup to attract buyers, which is great for sales but bad for the bottom line.

However, price cuts might be necessary for Tesla to remain competitive with its growing barrage of competitors. Chinese brands like BYD, Geely, and even Zeekr typically offer EVs at lower starting prices compared to Tesla in key markets like Europe, and they have also mostly caught up in terms of features.

However, Tesla CEO Elon Musk thinks his company's full self-driving (FSD) software could be a huge edge in the battle for EV market share. In regions where it's available, he said FSD has become the primary reason many customers enquire about buying a Tesla.

Tesla might be falling behind in the autonomous race

During a conference call with investors on July 22, Tesla's vice president of artificial intelligence (AI) Ashok Elluswamy said the company's autonomous taxi program has completed 380,000 miles of fully driverless operation across six cities in two U.S. states. This testing phase will lay the groundwork for the widespread regulatory approval of the unsupervised version of Tesla's FSD software.

As I mentioned, unsupervised FSD could be a big draw for many prospective EV customers, but it's also critical to the success of the Cybercab autonomous robotaxi, which recently went into production. Tesla is building a ride-hailing network where it can deploy fleets of Cybercabs all over the world, creating a high-margin revenue stream that flows consistently around the clock.

But the company is behind in this industry. Alphabet's Waymo is already completing over 500,000 paid, fully autonomous ride-hailing trips every week across 11 U.S. cities. It also has an expansion plan that includes 21 new cities, like London and Tokyo.

Waymo has also partnered with Uber, the world's largest ride-hailing network, giving its self-driving cars an incredible amount of reach. Even if Tesla's Cybercab is the best autonomous vehicle in the industry, the company will struggle to match Waymo's distribution.

Why Tesla stock could fall to $100

Expensive stocks tend to suffer the steepest losses during periods of turmoil in the broader market, as investors aim to reduce risk. Based on Tesla's trailing 12-month earnings of $1.08 per share, its stock is trading at a price-to-earnings (P/E) ratio of 288. That makes it eight times more expensive than the Nasdaq-100 technology index, which has a P/E ratio of 33.4.

TSLA PE Ratio data by YCharts.

If Tesla's earnings continue to decline, its stock might be even more expensive on a forward basis, which increases the risk of further downside. Speaking of which, even if the Nasdaq-100 enters a bear market and Tesla stock tumbles to $100, its P/E ratio would still be around 92, so even then it won't be cheap.

Tesla's P/E bottomed at around 30 during the last bear market in 2023. Since the company's earnings are lower today than they were back then, the same P/E would require a stock price of around $33 this time around. I'm not predicting that this will happen, because products like the Cybercab are closer to commercialization now, so investors might be willing to stomach a higher valuation because of the future growth potential.

Tesla's Optimus humanoid robot presents another major opportunity. The commercialization timeline is a bit vague right now because the company's engineers are still trying to perfect certain components, including its hands, but Musk previously told investors the robot could bring in a staggering $10 trillion in revenue over the long term.

As bullish as that sounds, I'm not prepared to pay nearly 300 times earnings for Tesla today in the hope Musk is right, especially given the jitters in the broader market.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Tesla, and Uber Technologies. The Motley Fool recommends BYD Company and Nasdaq. The Motley Fool has a disclosure policy.