Why Tesla Remains the Weakest Link in the Magnificent Seven for Your Next 10 Years of Investing

When evaluating the best stocks to hold for the next 10 years, the “Magnificent Seven”—Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta Platforms, and Tesla—represent an elite investment class. Together, these giants now account for approximately 35% of the S&P 500’s total value. However, not all seven deserve equal consideration for long-term portfolios seeking best stocks with sustainable growth. Tesla’s position as the weakest performer among this group warrants particular scrutiny for investors planning their next 10 years of wealth building.

The Fundamental Challenge: Tesla’s Core Business Lacks Momentum

What distinguishes Tesla from its Magnificent Seven peers is unmistakable when examining their financial trajectories. While Apple maintains robust revenue growth from iPhones and services, Amazon Web Services generates substantial free cash flow to fuel expansion, and both Alphabet and Microsoft draw reliable profits from diversified digital operations including cloud infrastructure, Tesla tells a different story.

The company’s automotive business—its financial engine—is losing steam. During the first half of 2025, Tesla’s EV deliveries trended downward despite retaining market leadership. The reversal proved temporary, as Q3 deliveries rebounded 7% year-over-year. Yet automotive revenue growth slowed to just 6%, a concerning deceleration. More troublingly, operating margins collapsed to 5.8% in Q3 from 10.8% the prior year—a precipitous drop that signals eroding profitability in the core business.

Meanwhile, the company continues lavish spending on artificial intelligence and robotics initiatives without demonstrable returns. This represents a fundamental vulnerability: Tesla is investing heavily in unproven ventures while its traditional business—the source of all current revenues—deteriorates.

Comparing the Competitive Landscape

The contrast with peers becomes sharper when examining how other Magnificent Seven companies balance proven cash generation with growth investments. Nvidia’s compute and networking division delivers exceptional results while maintaining multiple profitable segments. Meta’s “family of apps” generates enormous profitability, more than absorbing losses from its Reality Labs metaverse efforts. Each of these companies possesses what Tesla lacks: a thriving core business that funds ambitious moonshot projects.

For those seeking the best stocks for the next 10 years, this distinction matters enormously. A portfolio anchor needs proven, scalable earnings—not a deteriorating cash cow financing speculative bets.

The Robotaxi Promise Remains Unfulfilled

Tesla’s Robotaxi service launch represents a bold move in autonomous vehicle technology. Since mid-2025, the company expanded its ride-hailing operations from Austin, Texas to additional markets including the San Francisco Bay Area. Yet critical limitations persist. The service currently operates using standard Model Y vehicles equipped with Tesla’s autonomous technology—not the much-anticipated Cybercab that remains years away from production.

Regulatory hurdles compound the challenge. Most jurisdictions still mandate human monitors in autonomous vehicles, undermining the economics that theoretically make Robotaxi attractive. Whether this service achieves profitability at meaningful scale remains an open question.

The fundamental problem: Tesla has allocated massive resources to autonomous driving and robotics without achieving commercially viable operations. Investors betting on these ventures as salvation for the stock’s trajectory are essentially gambling on technology that may never deliver proportional returns.

The Valuation Question: A Premium Untethered from Reality

Perhaps most concerning for disciplined investors seeking the best stocks for sustainable returns over the next 10 years is Tesla’s valuation structure. The stock trades at 178 times expected 2026 earnings—a multiple so elevated it appears increasingly divorced from the company’s core EV business fundamentals.

Tesla’s current valuation rests almost entirely on speculation about future businesses: Robotaxis, humanoid robots, and other AI ventures. For investors who prize reasonable valuations paired with proven execution, this presents unacceptable risk. When the stock’s price tag reflects hopes rather than results, the asymmetry between risk and potential reward becomes unfavorable.

By contrast, the other Magnificent Seven constituents command valuations supported by substantial, ongoing earnings and cash generation. This fundamental distinction makes them more compelling candidates for the next 10 years of disciplined investing.

Why Better Alternatives Deserve Your Capital

For investors assembling portfolios of the best stocks to buy for the next 10 years, the message is clear: alternatives within the technology sector offer superior risk-adjusted returns. Companies with diverse revenue streams, healthy operating margins, and realistic valuations merit priority. Tesla’s position in the Magnificent Seven, while still commanding respect for its historical achievements, no longer justifies prominence in long-term wealth-building strategies.

The risks of investing in Tesla today—slowing core business, unproven new ventures, and astronomical valuation multiples—simply outweigh the potential rewards. Investors focused on the best stocks for the next 10 years should adopt a “wait-and-see” posture, monitoring whether Robotaxi and robotics initiatives eventually deliver meaningful profitability before committing capital.

The remaining members of the Magnificent Seven await more detailed examination, but the contrast with Tesla becomes evident immediately: proven business models, reliable cash generation, and valuations reflecting reality rather than speculation form the foundation of enduring wealth creation over multi-decade horizons.