Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta Platforms, and Tesla (TSLA 1.10%) form an elite group of companies known as the "Magnificent Seven" due to their industry leadership and market influence.
As many of these companies continue to deliver market-beating returns, the Magnificent Seven now comprise a remarkable 35% of the value of the S&P 500.
In a series of articles, I'll be ranking each of these stocks and discussing why some are still chock-full of untapped potential, while others should be avoided by investors.
Here's why Tesla is my least favorite of the bunch to buy in 2026.
Image source: Tesla.
Tesla's core business growth is slowing
If Tesla can effectively monetize some of its larger bets, such as its planned Robotaxi network, its humanoid robots, or its other artificial intelligence (AI) endeavors, it could easily be the single best Magnificent Seven stock to buy and hold for the next five to 10 years.
The major difference between Tesla and the other Magnificent Seven companies is that its core business is struggling.
By comparison, revenue growth remains strong for Apple's iPhone and services categories. Amazon Web Services generates gobs of free cash flow that funds the company's other ambitions. Alphabet and Microsoft each generate sizable earnings from a variety of digital segments, including cloud computing infrastructure, where they're both major players. Meta Platforms has its highly profitable "family of apps" segment, which brings in more than enough to support its billions of dollars in losses from Reality Labs, which contains its metaverse-related operations. And Nvidia's compute and networking segment continues to deliver jaw-dropping results, while its smaller segments are also highly profitable.
By contrast, Tesla's electric vehicle (EV) deliveries were trending downward in the first half of 2025, though it remains the market leader. Its energy storage business is on firmer footing, but it makes up a small part of the top line. In the third quarter, Tesla grew automotive revenue just 6% year over year as deliveries rebounded, up 7%. However, the company's operating margin fell to just 5.8% -- a steep decline from 10.8% a year earlier.
Tesla is spending a ton of money on artificial intelligence and robotics, but it has yet to see a payoff from those investments.
This past summer, Tesla launched its autonomous ride-hailing service in Austin, Texas, and it has since expanded it to a few other markets, including the San Francisco Bay Area. However, it remains to be seen how profitable it will be at scale.
It's also worth noting that, so far, that service is being provided by standard Model Y EVs that have been outfitted with Tesla's Robotaxi technology, not the much-discussed Cybercab, which is not yet in production. And in most markets, regulators are still requiring human monitors for those autonomous vehicles.
NASDAQ: TSLA
Key Data Points
There are better buys than Tesla for 2026
Tesla's Robotaxis feature pioneering-edge AI, which presents distinct challenges compared to embedding AI within smartphones or personal computers, so the company deserves credit for making progress in that field.
However, the risks of investing in Tesla simply aren't worth the potential rewards at this time, especially given the fact the stock is trading at 178 times expected 2026 earnings.
Since Tesla's valuation appears to be increasingly disconnected from its core EV business and based more on the potential of new ventures that have yet to prove themselves, investors may want to take a "wait and see" approach to the stock at this time. There are many other compelling buys in big tech.
Stay tuned to find out how the remaining Magnificent Seven stocks stack up in my rankings for 2026.
