Big Short Investor Michael Burry Says Tesla’s Valuation Still Looks Stretched

Michael Burry — the investor known for calling the 2008 housing crash — is once again questioning Tesla (Zorrox: TSLA.), arguing that markets still price the stock for a future that may take longer to materialize than bulls want to admit. His comments reignite a long-running debate around whether Tesla remains a high-conviction growth bet or an over-extended tech narrative propped up more by belief than by fundamentals.

A Premium That Won’t Die Easily

Tesla has never traded like a traditional automaker. Investors assign it multiples closer to high-growth tech, assuming future dominance across energy storage, autonomous driving, AI, and robotics. Burry’s perspective is simpler — capital markets have rewarded possibility far more than profit. Delivery volumes are strong, but successive price cuts have narrowed margins. In a maturing EV market, valuation premium becomes harder to justify if profitability weakens.

This is not a claim that Tesla is failing — it’s a reminder that gravity exists. A stock built on expectations must continue delivering expectations.

Bulls Still See a Platform, Not a Car Business

Tesla’s strongest supporters argue that valuing the company like Ford or Toyota is a category error. From their point of view, Tesla is a software-first ecosystem with optionality that legacy manufacturers lack. Full Self-Driving subscriptions, energy storage revenue, grid services, fleet automation — these future revenue streams fuel long-term optimism.

But timelines have slipped. Regulators are cautious, autonomy remains incremental, and broader monetization is not yet at scale. Markets once gave infinite runway for “what could be.” Now they want clearer revenue paths.

Competition and Margins Are Tightening

China has shifted the EV landscape faster than expected. BYD and regional manufacturers are pushing aggressively into global markets with lower-cost models, forcing Tesla to defend market share rather than simply collect it. Price reductions keep delivery numbers healthy, but even mild compression in margin assumptions can destabilize valuation logic at scale.

Burry’s stance is rooted here — valuation can remain high only while earnings catch up. If earnings stall, price adjusts downward instead.

Sentiment Drives Tesla More Than Spreadsheets

Tesla remains one of the most sentiment-sensitive tickers in global equities. Retail participation is high, narratives move fast, and intraday swings often reflect emotion more than fundamentals. Elon Musk’s commentary, delivery headlines, regulatory news, macro liquidity — each can trigger price moves disproportionate to fundamentals.

This is why Burry hasn’t broken the stock by criticizing it. Tesla trades as a belief asset — and belief assets unwind only when confidence thins.

Markets Wait for Proof

Tesla doesn’t need to collapse for Burry to be right. It only needs time. If autonomy scales, energy revenue matures, and software margins compound, Tesla can grow into today’s valuation. If they don’t pace fast enough, price normalizes.

The market now asks a simple question: Does Tesla deliver the future fast enough to justify the present?

That answer will drive the next decade of pricing more than any headline.

Tips for Traders

• Watch Tesla (Zorrox: TSLA.) closely around delivery results, margin guidance, and pricing strategy shifts — these are the catalysts that move the stock hardest.

• Treat sentiment as a core trading variable; Tesla reacts to narrative tone and risk appetite faster than most mega-caps.

• Monitor margin trends — valuation sensitivity is high, and further compression could pressure long-term bullish models.

• Track progress in Full Self-Driving monetization; regulatory or technological breakthroughs could rapidly reprice expectations.

• Watch China competition — BYD and others squeeze global pricing power and could reshape Tesla’s growth runway.

• Expect volatility — Tesla behaves like a conviction-driven asset where upside squeezes and downside breaks are both real scenarios.

• Use sizing discipline — narrative stocks reward precision, not blind exposure.