Tesla (TSLA 0.66%) just might be the most popular investment on the market. Its stock saw the most net inflows from retail investors last year, according to data from Vanda Research. And roughly 43% of Tesla shares are owned by the public -- one of the highest percentages among large U.S. companies, according to data from S&P Global Market Intelligence.

Clearly, many retail investors like Tesla stock. Yet after the company reported 2023 fourth-quarter and full-year results recently, shares tumbled. That's because the automaker stated, "In 2024, our vehicle volume growth rate may be notably lower than the growth rate achieved in 2023." Now, shares are far below the 52-week high of $299.29 achieved last July.

With the recent drop in share price, does it make sense to invest in Tesla stock? Let's dig into the company to arrive at an answer.

Tesla's strengths

For full disclosure, I'm one of those retail investors who owns Tesla stock. I purchased shares years ago after buying my first Tesla and realizing the car's technological advances are a significant improvement over conventional gas-powered vehicles.

This technology serves as one of Tesla's competitive strengths. Tesla beats many EV competitors in areas such as the distance its cars can travel on a single battery charge. In terms of driving range, Tesla's cars captured four of the top 10 spots among EV models sold in the U.S. last year.

Its autopilot driver assist technology, a step on the path toward a fully autonomous driving system, is one of the most advanced of its kind on the market. Autopilot can perform driving tasks such as braking, acceleration, steering and lane changes by itself.

Another key Tesla advantage is its global network of charging stations, making it convenient to charge on the go. In the fourth quarter, Tesla's chargers expanded 27% year over year to nearly 6,000 locations compared to less than 5,000 in the prior year, making it the largest charging network of its kind, according to the company.

Not only is this a competitive advantage, it's a revenue generator. This revenue falls under the company's services and other business segment, which has grown sales every year. In 2023, this division generated $8.3 billion of Tesla's $96.8 billion in revenue, rising 37% year over year. And sales will likely grow even more as many competitors, including Ford and General Motors, adopt Tesla's charging standards.

Tesla's performance

Tesla's technology helped it become a leader in the EV market. The company was tops in market share in 2022 but dropped to second in 2023 behind Chinese firm BYD as China became the largest EV car market. Even so, Tesla continued to deliver strong sales performance.

And that performance was impressive in 2023. Tesla closed out the year with its Model Y becoming the best-selling car in the world. This is the first time an EV achieved the top spot, which Toyota had dominated for years.

As a result, total 2023 revenue rose 19% year over year to $96.8 billion. Net income also grew 19% year over year to $15 billion. This double-digit rise in net income is impressive, considering Tesla cut car prices in 2023 as EV competition heated up.

Its profits were helped by the company's management, who drove down the cost of producing cars. Tesla's cost of goods sold per vehicle dropped from over $39,000 in 2022's Q4 to under $37,000 in 2023.

Deciding on Tesla stock

More sales growth is likely to come. After all, EVs exploded from 4% of the passenger car market in 2020 to 14% in 2022. This year, the EV market is forecast to generate $623.3 billion in global sales, growing to $906.7 billion by 2028.

This industry expansion serves as a multiyear tailwind for Tesla's sales, even though its revenue growth may slow in 2024. CEO Elon Musk explained this year's slowdown, saying, "Tesla is currently between two major growth waves."

The first wave was when the company's lower-priced Model 3 and Y vehicles became globally available. The next surrounds Tesla's next generation of vehicles and other projects such as implementing artificial intelligence into its cars.

Consequently, the company expects its new product lines to fuel future revenue growth. Its tech may give it the competitive advantage to succeed, as illustrated by the widespread adoption of its charging standards.

With AI-enabled vehicles now on the horizon, Tesla looks poised to bring more technological advances to the automotive industry in the years ahead. This, combined with its track record of profitable revenue growth, is why Tesla remains a buy. With its recent drop in share price, now is a good time to pick up Tesla stock and hold it for the long term.