TSLA Stock Breaks Losing Streak: Fund Manager Says Autonomy Beats Rich Valuation

• Gary Black argued that investors are better served shorting companies with deteriorating business fundamentals rather than those trading at rich valuations alone.
• Black criticized many portfolio managers and analysts for relying primarily on valuations and short-term earnings estimate trends rather than deep fundamental analysis.
• With TSLA, Black pointed to the company’s leadership in unsupervised autonomy technology as a potential game-changer.

Gary Black, managing partner and co-founder of The Future Fund LLC, said on Wednesday that his firm will not short EV giant Tesla Inc (TSLA) despite a potential third consecutive year of declining vehicle deliveries in 2026.

TSLA stock traded 2% higher at the time of writing, on track to break out of a four-day streak of closing in the red.

Black’s Rationale For Shorting

Black argued that investors are better served shorting companies with deteriorating business fundamentals rather than those trading at rich valuations alone.

“In shorting stocks, it’s far better to short a company with deteriorating fundamentals than a rich valuation,” he wrote. He defined deteriorating fundamentals as “a bad business model where volumes are declining, or there’s no innovation, or management can’t execute, or there’s a loss in pricing power because of excess competition and a lack of differentiated products.”

Black criticized many portfolio managers and analysts for relying primarily on valuations and short-term earnings estimate trends rather than deep fundamental analysis. “Over and over again, getting a company’s fundamentals right beats valuation insight,” he stated. He noted that many in the industry come from financial backgrounds and pay “little or no attention to fundamentals.”

Black’s TSLA Thesis

With Tesla, Black acknowledged challenges in the company’s core EV business. He projected that 2026 would mark Tesla’s third straight year of declining deliveries, even as the broader global EV market is expected to grow 20-25% in units. Early 2026 data showed Q1 deliveries of 358,023 vehicles, a modest year-over-year increase from a weak prior period.

Black highlighted Tesla’s promotional strategies — zero-interest financing and incentives — as insufficient and not effectively communicating competitive advantages. Nevertheless, he pointed to the company’s leadership in unsupervised autonomy technology as a potential game-changer capable of generating significant new revenue streams to offset EV weakness.

“While TSLA’s 2026 P/E of 210x seems way extended vs +35% long-term earnings growth, we would not short TSLA stock on what are largely valuation grounds,” Black concluded. However, Black has trimmed or exited its positions in Tesla on valuation grounds.

How Did TSLA Retail Traders React?

On Stocktwits, retail sentiment around TSLA stock stayed within the ‘Neutral’ territory over the past 24 hours, while message volume stayed within ‘Normal’ levels.

A Stocktwits user termed TSLA  a forever hold in their portfolio.

TSLA stock has risen 20% over the past 12 months.

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