- TSLA +4.08%
A familiar target is back in Michael Burry’s crosshairs, and he isn’t pulling any punches.
The “Big Short” investor used his popular Substack blog to take fresh aim at Tesla (TSLA), a new Business Insider report says, making the case that the EV pioneer’s nosebleed valuation has drifted into fantasy territory.
Burry's view is based on Tesla’s sluggish growth numbers, competition, and an unsustainable cycle of shareholder dilution linked to CEO Elon Musk’s $1 trillion pay package.
It’s not Burry’s first time sparring with Musk, but his latest critique comes at a pertinent time, as Tesla looks to convince Mr. Market that its Robotaxis and humanoid robots can reignite the growth story.
For Burry, the pivot is far from being an evolution.
Musk continues to promise, and it seems more like a company scrambling to justify a price tag that’s utterly divorced from its fundamentals.
Michael Burry is taking fresh aim at Tesla, arguing the stock’s valuation has become detached from reality.Photo by Bloomberg on Getty Images Burry fires latest salvo at Tesla stock
Burry’s latest jibe at Tesla comes as he bangs the drum on what he calls an AI-fueled bubble sweeping through Big Tech.
Fresh off revealing his bearish positions against AI bellwethers Nvidia and Palantir, the legendary investor argues that Tesla’s no different, and that its valuation has been disconnected from its fundamentals for years.
For perspective, according to Seeking Alpha, Tesla stock is trading over 15 times forward sales estimates, 1,515% higher than the sector average.
Related: Cathie Wood dumps $8.46 million in software giant
On the bottom-line front, things get even more testing, with the stock trading more than 335 times forward GAAP earnings (1,620% higher than the sector average).
Burry’s recent warnings (AI bubble):
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Late October 2025: Burry took to X (formerly Twitter) with a cryptic “AI bubble” warning, announcing his re-entry into the stock market conversation following months of silence.
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Early November: Filings showed massive bearish bets against Nvidia and Palantir, as Burry began shutting down Scion Asset Management to focus purely on public commentary.
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Mid/Late November: A public back-and-forth erupted as AI-poster child Nvidia responded to his claims. Burry fired back on Substack, insisting he still holds put options on both stocks.
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Late November: Burry launches his “Cassandra Unchained” Substack, warning of an AI-driven bubble.
Moreover, he argues that Tesla has now posted multiple quarters of declining sales and weakening deliveries, a remarkable pivot from the solid numbers it reported that fueled its lofty valuation.
Related: Michael Burry’s net worth: How the ‘Big Short’ investor got rich
Tesla’s recent earnings performance:
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FQ3 2025 (September 2025) EPS: $0.50 (missed by $0.06) Revenue: $28.10 billion (beat by $1.39 billion)
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FQ2 2025 (June 2025) EPS: $0.40 (in line) Revenue: $22.50 billion (beat by $408 million)
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FQ1 2025 (March 2025) EPS: $0.27 (missed by $0.14) Revenue: $19.34 billion (missed by $1.99 billion)
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FQ4 2024 (December 2024) EPS: $0.73 (missed by $0.04) Revenue: $25.71 billion (missed by $1.42 billion) Source: Seeking Alpha
At the same time, Burry feels Tesla stock investors are being diluted at a pace they aren’t fully grasping at this point.
Related: ‘Rich Dad Poor Dad’ author drops stark warning on stock market
In addition, he believes Musk’s $1 trillion compensation package will likely make things even murkier.
It not only bumps the share pool, but also reduces existing shareholder ownership percentages, compelling shareholders to finance Musk’s upside by compromising their own interests.
Contingencies and requirements of Musk’s $1 trillion plan
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Massive market-cap target: Tesla must reach a whopping $8.5 trillion in valuation, representing nearly a sixfold increase from 2025 levels.
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Operational milestones: The plan entails achieving major milestones in vehicle production, top-line expansion, and other key performance metrics linked to long-term growth areas, covering Robotaxis and robotics.
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12% share issuance: Musk’s award represents 12% of all Tesla shares, issued in tranches as milestones are met, resulting in substantial dilution.
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Revised after court reversal: The package replaces the previous $56 billion (2018) plan, voided by the Delaware court in 2024, extending the horizon to 2025-2035 while raising the stakes exponentially.
Related: History of Tesla & its stock: Timeline, facts & milestones
The "Elon cult" and shifting narratives
Apart from pricing, Burry also took shots at Tesla’s pattern of shifting storylines.
He argued that the business moved from predominantly being an EV giant to now touting autonomous driving leadership, only to pivot again toward humanoid robots as the competition gained ground in both areas.
Every transition is less about natural evolution and more about strategic reframing to continue maintaining excitement as its core automotive growth slows.
Inside Wall Street’s most polarizing stock
Tesla has been a battleground stock for years, where its fans and seasoned detractors see two completely different businesses.
The bulls argue that its nosebleed valuation is reflective of its promising future as a tech-first powerhouse. The bears feel the exact opposite, arguing that, by traditional metrics, the stock is priced far beyond its actual value.
That tension has often prompted popular short-sellers, including Jim Chanos and David Einhorn, to label the company egregiously overvalued.
Fund manager buys and sells
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Stanley Druckenmiller’s latest buys suggest shifting tech trend
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Fund manager has surprising take on big Tesla stock drop
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Jim Cramer delivers urgent take on the stock market
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Cathie Wood dumps $30 million in longtime favorite
Musk hasn’t let many of the short-seller moves slide, either.
He famously predicted a “short burn of the century” back in 2018, The Atlantic reported, a rally that effectively torched shorts roughly 18 months later.
In a cheeky jab, Business Insider noted, Musk even mailed Einhorn a literal box of “short shorts” as the losses continued mounting.
Beyond trolling, Musk argues that Tesla deserves its premium valuation, as it's far more than just a carmaker. The modern-day Tesla is a a sprawling tech conglomerate with major long-term ambitions in energy, software, AI, Robotaxis, and robotics.
Nevertheless, Musk remains as resilient as ever, predicting, as Business Insider reports, that the EV giant will become “the most valuable company on Earth,” and that the bears simply “don’t get” the long-term vision.
Related: This defense-AI stock is up 50 percent in 6 months: It’s not Palantir
This story was originally published by TheStreet on Dec 2, 2025, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.
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