Is Tesla a Good AI Growth Stock to Buy and Hold For the Next 10 Years?

With shares of some AI (artificial intelligence) stocks, including AI chipmaker Nvidia, already trading meaningfully lower year to date, it's a good time to look at AI stocks to see if any are worth investing in. One notable AI growth stock that is already down sharply year to date is electric vehicle company Tesla (NASDAQ: TSLA).

As the market gets skittish about AI stocks' prospects following a big year for tech stocks that was largely driven by investor excitement for AI themes, shares of Tesla have already given back a meaningful portion of their 2025 gains -- along with many other popular stocks whose future prospects are tied closely to AI-related growth opportunities. As of this writing, shares of Tesla are down about 6% year to date.

Is now a good time to buy and get in on the exciting things the company has planned for the coming years?

The interior of Tesla's yet-to-be released Cybercab vehicle, which is purpose-built for an autonomous driving experience. Image source: Tesla.

More than an electric car-maker

To some investors, Tesla may be just an electric-car maker. But to Tesla CEO Elon Musk, there's far more to the story.

"We are at a critical inflection point for Tesla and our strategy going forward as we bring AI into the real world," Tesla CEO Elon Musk said in the opening remarks of the company's third-quarter earnings call. "I think it's important to emphasize that Tesla really is the leader in real-world AI."

Specifically, Tesla is in the early stages of rolling out its autonomous ride-sharing service, Robotaxi, using its own cars.

This will fundamentally change transportation, Musk believes.

To his credit, there's good reason for Musk to be excited about Robotaxi. The CEO believes that every Tesla vehicle, including more than 1.6 million in 2025 alone, will eventually be capable of unsupervised autonomous driving. It's just a matter of some behind-the-scenes work the company needs to do on its software; and once the software is ready, Tesla can ship it via an over-the-air update. This means that in a very short period, Tesla could become by far the world's largest autonomous ride-sharing taxi company, providing both the service and the autonomous vehicles.

These numbers tell a more pessimistic story

The problem is that this outcome (the eventual success of a mass-market Robotaxi rollout) may already be priced into the stock. As of this writing, shares command a price-to-earnings ratio of more than 300. This is a particularly extraordinary valuation, considering that there is no precedent for a scaled autonomous ride-sharing network, let alone a profitable one. So, investors just have to trust that it will work out, despite uncertainty about not only the required technological advancements and regulatory approvals, but also the business economics of the model and the timeline for its rollout at scale.

Adding to the problems, Tesla's deliveries are moving in the wrong direction. Total vehicles delivered in 2025 were 1.636 million, down from 1.789 million in 2024. And the company's bottom line isn't doing any better. Net income fell 37% year over year in Tesla's most recently reported quarter.

Tesla stock: buy, sell, or hold?

Ultimately, I think Tesla is a very speculative bet -- likely one worth avoiding for now.

If Musk's ambitious vision for Tesla's future proves to be somewhat close to reality, an investment in the growth stock at today's price could pay off well over the long haul. But with very little substance in the form of vehicle sales and financial trends in the meantime, investors have to lean heavily on speculation. So, with that said, I think it's wise to hold off on buying and be patient to see if the market offers a better entry point in the future.

At a certain price, however, I do think Tesla's stock is worth buying. After all, the underlying business has great potential if given enough time. But price matters -- and I just don't think shares are trading low enough to compensate investors for the risks of this speculative bet not working out as planned.

Daniel Sparks and his clients have positions in Tesla. The Motley Fool has positions in and recommends Nvidia and Tesla. The Motley Fool has a disclosure policy.