Tesla (NASDAQ: TSLA) has dropped 22% this year, standing in stark contrast to its Magnificent 7 peers, raising serious doubts about whether it belongs in the group at all.
While Tesla slides, three Magnificent 7 members have outperformed the S&P 500, with Apple (NASDAQ: AAPL) up 17%, Nvidia (NASDAQ: NVDA) up 16%, and Amazon (NASDAQ: AMZN) up 15%.
The remaining members of the group are deeply committed to artificial intelligence, each racing to build out their own infrastructure and data center capabilities at enormous scale.
Across the Magnificent 7, along with OpenAI and Anthropic, AI infrastructure spending is nearing $1 trillion next year and is expected to continue rising for the foreseeable future.
Tesla, by contrast, makes cars, and its most recent quarterly results make that reality impossible to ignore.
During the most recently reported quarter, Tesla produced over 450,000 vehicles and delivered over 480,000, generating total revenue of $28.4 billion, of which $20.5 billion came from automotive sales.
An additional $3.1 billion came from energy generation and storage, further reinforcing that Tesla’s business is rooted in physical products rather than transformative software or AI platforms.
Tesla’s autonomous driving ambitions remain far from realization, with its “Full Self-Driving” system still requiring driver supervision and not yet approved for full autonomy.
Its Robotaxi program has only been approved for testing in a few cities, and local authorities will need to grant further approvals before any meaningful commercial rollout can proceed.
The Optimus robot program remains in its infancy, and while Elon Musk has claimed hundreds of millions of units could be operating worldwide within a decade, many robotics experts have questioned that projection.
If investors want exposure to Musk’s AI ambitions, a stronger case exists for looking at SpaceX (NASDAQ: SPCX), which houses the xAI division directly focused on artificial intelligence development.
The Magnificent 7 designation carries weight because it implies transformative technology leadership, and by that standard, the group would be more accurately described as the Magnificent 6 without Tesla.
