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What Tesla Stock Looks Like in 10 Years If Musk Hits Pay Targets

Nov 11, 2025 05:16:00 -0500 by Al Root | #EVs

A Tesla Model Y operating as a robo-taxi operating in Austin, Texas. Investors believe self-driving technology is key to unlocking a new era of earnings growth for the EV maker. (Tim Goessman/Bloomberg)

Key Points

So what would Tesla stock look like if CEO Elon Musk pulls it off and hits all his performance goals over the next decade, earning him a cool $1 trillion in the process?

The answer is relatively simple: Like a Magnificent Seven stock.

Tesla shareholders recently voted to award their CEO an unprecedented pay package of some 425 million restricted shares. To unrestrict them, Tesla has to sell millions of cars, autonomous driving subscriptions, robo-taxis, and robots. All that must add up to an $8.5 trillion market capitalization and $400 billion in annual earnings before interest, taxes, depreciation, and amortization, or Ebitda.

Tesla is expected to generate 2025 Ebitda of about $13 billion from sales of just under $100 billion. That leaves the company’s shares trading north of 100 times Ebitda and more than 200 times estimated 2025 earnings per share.

The Mag 7 stocks, excluding Tesla, trade for an average of about 19 times estimated 2025 Ebitda, and 31 times earnings, according to Bloomberg. The six—Google parent Alphabet, Amazon, Apple , Meta Platforms , Microsoft, and Nvidia —are expected to generate roughly $1 trillion in 2025 Ebitda with an average Ebitda profit margin of about 46%. Nvidia has the top margin at 61%. Amazon.com has the lowest at 23%.

If Tesla were to generate 2035 Ebitda of $400 billion, earning Musk his money, the shares would likely be trading for roughly 30 times earnings, net of cash, and about 18 times Ebitda. That’s very Mag 7-like.

Several assumptions are used to arrive at that conclusion—including ones related to cash generation, capital spending, tax rates, and profit margins. Things could, and likely will, turn out differently. A financial model doesn’t always accurately reflect the future. It’s only a guide to help investors.

In this instance, Barron’s model appears to reflect what investors expect. Shareholders believe Musk can do it. If they didn’t, the stock wouldn’t be worth $1.4 trillion today.

Can it happen, though? Can Musk really pull it off? That’s a decision for individual investors to make. Expanding Ebitda 30-fold in 10 years seems unfathomable. There is some precedent, though. Nvidia was generating between about $5 billion and $10 billion in annual Ebitda before the explosion in AI computing. Now, Wall Street expects calendar year 2026 Ebitda of about $130 billion and 2027 Ebitda of about $190 billion.

If analysts are correct, Nvidia’s Ebitda will expand 30-fold in what feels like the blink of an eye. Sky-high demand for its AI chips is, of course, why Nvidia is earning more money. Tesla investors expect Tesla to take those chips and create AI applications that will do the same for its income statement.

“Physical AI products are still a long way off,” wrote Truist analyst William Stein in a Monday report. The “vast” majority of Tesla’s value is tied up in physical AI technology, such as robots and robo-taxis. “Yet, all of these projects are quite unproven [and] close to zero revenue.”

Stein is skeptical, rating Tesla shares Hold. His price target, however, is $406 a share, valuing Tesla at more than $1.2 trillion.

Tesla stock dropped 1.3% on Tuesday, closing at $439.62, while the S&P 500 and Dow Jones Industrial Average gained 0.2% and 1.2%, respectively.

Coming into Tuesday trading, Tesla stock was up 10% so far this year and 27% over the past 12 months.

Write to Al Root at allen.root@dowjones.com