Tesla's Tech Credentials Questioned by Magnificent 7 Membership
The Magnificent 7 (Mag7) club consists of seven elite companies that are pushing the boundaries of technology, particularly in artificial intelligence. However, Tesla's performance has raised questions about its membership in this exclusive group.
This year, only three Mag7 companies have outperformed the S&P 500: Apple, up 17%; Nvidia, up 16%; and Amazon, up 15%. Meanwhile, Tesla has cratered, down 22%, and is being questioned as to whether it truly belongs in the group.
The argument is that Tesla makes cars, not tech. While Elon Musk's company has invested heavily in AI research through its xAI division within SpaceX, there is little evidence to suggest that Tesla itself is a tech company.
Tesla's revenue comes primarily from automotive sales, with $20.5 billion generated this year alone. Its autonomous car business, despite some progress, still requires driver supervision. The company's Robotaxi has been approved for testing in select cities, but its safety features and long-term viability remain uncertain.