Many investors see Tesla (TSLA -2.06%) as an electric vehicle (EV) stock. And it is. However, there's more to the story.

Ark Invest CEO Cathie Wood thinks that "Tesla is the biggest AI [artificial intelligence] play out there." Based on a recent statement by Tesla CEO Elon Musk, she might be right.

Musk recently claimed that Tesla made a huge AI breakthrough. But while Tesla stock is up close to 90% year to date, it's down nearly 20% below the peak reached a few weeks ago. Based on the recent announcement, is this high-flying stock a buy on the dip?

Musk's monumental claim

Last week, Musk responded to a complimentary post on X (the social media platform formerly known as Twitter) about Tesla's full self-driving (FSD) technology. His reply raised a lot of eyebrows.

Musk appears to believe that Tesla's FSD vehicle "has a mind." In particular, he thinks that Tesla could have made a significant advance in artificial general intelligence (AGI).

AI can solve specific problems, such as OpenAI's ChatGPT managing to summarize a document with just a request to do so. AGI holds the potential to solve any problem that a human can solve -- and perhaps some that humans can't solve.

Musk didn't elaborate on exactly what AGI breakthroughs Tesla has made or why he thinks the FSD cars have minds. However, one comment on his post showed videos of a Tesla FDS vehicle making the decision without any human input to take an alternate route rather than wait on pedestrians at a city street's crosswalk. This could be an example of what prompted Musk's claim. 

Why a major AGI advance could be a big deal for Tesla

Some call AGI the "holy grail" of AI. If Tesla has indeed made a major AGI advance, it could be a big deal.

The obvious benefit for Tesla is that an AGI breakthrough could get the company much closer to its goal of cracking the robotaxi market wide open. Ark Invest's bull case for the robotaxi market projects that Tesla could have a market cap of nearly $8 trillion by 2027. That's well over 10 times the company's size today. 

Tesla could also have a much larger opportunity with its semi-tractor EV trucks if they could be fully autonomous as a result of key AGI advances. One of the biggest challenges for the trucking industry, year in and year out, is finding enough drivers.

But that could be just the tip of the iceberg if the AGI progress made by Tesla can be applied to other areas. AGI has the potential to be used in customer service, manufacturing, drug development, financial trading, data analysis, and a lot more.

Buy Tesla on the dip?

Should investors rush to buy Tesla on the dip after Musk's AGI comment? They certainly haven't done so yet.

Many people have learned not to believe everything they read on the internet. Some could especially be skeptical about Musk's claims. The multibillionaire has faced litigation over past social media posts that were alleged to be false. 

Perhaps Tesla has achieved major breakthroughs in AGI. Maybe the company's FDS cars really do have "minds," as Musk suggested. For now, though, there's simply not enough clear evidence to know for sure.

All this means investors should make their decisions about whether to buy Tesla stock based on what they do know. The company has a tremendous market opportunity, regardless of the accuracy of Musk's recent claim about AGI. On the other hand, Tesla already has a lot of growth baked into its share price, with the stock trading at over 70 times forward earnings.

My personal take is that Tesla stock should be a winner over the long run, but will likely be highly volatile over the near term. I don't know if Musk is right that the FSD vehicles have minds. But I have no doubt whatsoever that Tesla is just as much an AI stock as it is an EV stock.