Is Tesla the New AOL?

Creatix Markets / September 21, 2025

Tesla's AI-bubble “meme valuation.”

TL;DR: Tesla trades at a venture-style multiple on promises of robotaxis, humanoids, and “AI everywhere,” despite slowing EV growth and margin pressure. That’s eerily similar to AOL at the peak of the dot-com euphoria when narrative outran cash-flow reality, and the eventual comedown was brutal.

Valuation snapshot (as of Sept 20, 2025)

• Market cap: ≈ $1.4 trillion. (Macrotrends)

• P/E (TTM): roughly ~225–250× (sources vary by EPS basis/date). (Companies Market Cap)

• Context: Toyota ~9×; BYD ~17–20×; NVIDIA ~ 50x. (Macrotrends) Tesla's P/E ratio is 5 times NVIDIA's, the poster child of the AI "bubble". 

Stock market information for Tesla Inc (TSLA)

• Tesla Inc is a equity in the USA market.
• The price is 426.07 USD currently with a change of 9.05 USD (0.02%) from the previous close.
• The latest open price was 422.5 USD and the intraday volume is 93131034.
• The intraday high is 429.44 USD and the intraday low is 418.5 USD.
• The latest trade time is Friday, September 19, 20:15:00 EDT.

The bull story is AI, not cars

Tesla’s 2024 revenue was $97.7B, up just 1%, with auto sales revenue down 8% on price cuts; energy grew to $10.1B. Net income to common fell to $7.1B (benefit-lap effects and price pressure). (SEC)
Unit momentum sagged: 2024 deliveries fell 1.1% (first down year since 2020) and Q2’25 deliveries fell ~13.5% YoY. (Reuters)

So why the mega-multiple? Because the narrative has pivoted from “car company” to AI platform—robotaxis, Optimus robots, and Dojo-scale training. Tesla unveiled its Cybercab robotaxi concept in Oct 2024 and keeps signaling a ride-hailing network, then in June 2025 ran a small Austin, Texas pilot: first inviting a select group with front-seat safety monitors, followed by tightly constrained, $4.20 “driverless” rides that nonetheless drew videos of driving mistakes in early days. Arizona has since granted approval for testing with safety monitors (not driverless), reinforcing that these are supervised trials, not commercial autonomy at scale. Meanwhile, NHTSA oversight continues after the broad 2023 Autopilot recall and subsequent probes into FSD-related crashes. None of that is mass-scale robotaxi unit economics yet. (reuters.com)

“Irrational exuberance” checklist

• Multiple far above autos and big tech’s historical bubble markers. Even bullish street work on the AI rally pegs peak bubble P/Es around ~58; Tesla’s TTM multiple at almost 250 is several-fold higher. (Investopedia)

• Core engine stalling: Prices down, deliveries down, profits compressed while the stock keeps rising on hype about future autonomy take-rates. (SEC)

• Strategic wobble: Reports in 2024 said the low-cost “Model 2” was shelved in favor of robotaxis; in late 2025, the “AI pivot” is now the story. (Reuters)

The AOL parallel

At the top of the last tech mania, AOL used its stock as currency to merge with Time Warner in a deal announced Jan 10, 2000 and variously valued around $160–$180B depending on framing. The combined empire later unraveled; AOL was spun back out (2009) and eventually sold to Verizon for $4.4B (2015). The lesson wasn’t that AOL had no business—it had subscribers, media, adtech—but that the market priced in an internet future far sooner and richer than reality. (HISTORY)

Tesla’s rhyme with AOL:

• Narrative premium: AOL = “own the internet”; Tesla = “own autonomous mobility/AI.”

• Business mix mismatch: AOL’s dial-up cash cow decayed as broadband rose; Tesla’s car margins have thinned as competition intensifies, leaving the speculative “tomorrow’s AI profits” to carry today’s valuation. (SEC)

• Regulatory/tech uncertainty: AOL confronted access/interoperability fights; Tesla faces autonomy regulation, safety scrutiny, and hard technical constraints. (WIRED)

• Endgame risk: When the growth engine lags the story, multiple compression can be merciless—AOL went from world-beater to a rounding error in a decade. (Reuters)

The meme-stock machine behind Tesla

Strip away the sci-fi pitch, and Tesla often trades like a meme stock: price action turbocharged by social-media hype, options frenzies, and waves of retail buying untethered to near-term fundamentals. Bloomberg’s Liam Denning put it bluntly: “Tesla is a car company. Its stock is a meme.” (Yahoo Finance)

Retail, very online, very reactive. Tesla is consistently among the most-traded and most-held names for U.S. retail, particularly on youth-skewing brokerages, showing up at or near the top of Robinhood/Apex generational lists and retail-flow tallies. On single days, retail investors have poured hundreds of millions of net dollars into TSLA, per Vanda data cited by Reuters. That behavior is classic meme dynamics: buy the rumors, sell the news, buy the dip, repeat. (Reuters)

Options as rocket fuel. Tesla is routinely one of the hottest single-stock options tapes on Wall Street, at times accounting for a double-digit share of all U.S. options volume, amplifying swings and reinforcing herd moves in both directions.

Who profits from the meme multiple? Beyond traders, fund managers benefit when Tesla’s valuation balloons: index giants and active ETFs collect more fees as AUM swells, and some actively lean into the name during hype cycles. Vanguard and BlackRock rank among the largest TSLA holders; ARK’s flagship ETF has repeatedly kept Tesla as a top position (~12%) even while tactically trimming into rallies. Research has also shown how Tesla’s S&P 500 inclusion and passive flows magnified speculative pricing.

Bottom line: a young, online fan base + option-driven feedback loops + passive/active flow mechanics can levitate the stock far beyond what car-company cash flows support and even what AI stocks support. Tesla's stock is textbook meme-era exuberance dressed up in AI.

“But Tesla isn’t AOL” (steelman)

True: Tesla owns factories, IP, a global charging network, and a growing energy unit. If Tesla actually deploys driverless robotaxis at scale (not supervised pilots), unlocks new software take-rates, and proves humanoid robotics economics, today’s multiple might be justified. Those are big, binary outcomes with long regulatory lead times. (SEC)

Verdict

Tesla is today's AOL. In the late-1990s, AOL rode dial-up dominance to bubble-era heights, announcing a merger with Time Warner in January 2000 that created the largest corporate combination of its day (the deal closed Jan. 11, 2001, with a combined value often cited around $300–$360B). As broadband displaced dial-up, growth stalled and the combined company recorded a record loss of about $99B in 2002 on massive goodwill write-downs tied largely to the AOL unit. By December 2009, Time Warner spun AOL back out as a stand-alone firm; by 2015 Verizon acquired AOL for $4.4B, a tiny fraction of its turn-of-the-century aura. Even in 2025, headlines about AOL are about sunsetting dial-up and private-equity portfolio moves, not world domination. The lesson: when the narrative premium evaporates, valuation can collapse to the cash-flow reality.

Right now, Tesla’s stock looks less like a discounted cash-flow on cars and more like a crowd-priced call option on an AI utopia. That’s classic AOL-style exuberance: breathtaking valuation first, durable economics later if at all. If all of the exuberant AI promises work perfectly and Tesla scales to trillions of dollars in sales, Tesla will earn its crown. If not, the fall from meme multiple to mortal margins could rhyme with AOL's history.

Now you know it.

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