You Can Do Better Than Tesla. Buy Micron Instead.
2026-10-04 17:30
•Rick Orford •The Motley Fool
•••••• •• Axe Cap view
Why Micron Beats Tesla as a Growth Play
Tesla's sky-high valuation and slowing growth make Micron's steady profit surge a smarter bet.
Tesla trades at a mind-boggling P/E of 345, far above its sector average, yet its growth is cooling and profit margins are razor-thin. The market has already priced in its AI and robotics ambitions, which remain unproven and risky. Meanwhile, Micron has run up 500% but still sits on a reasonable P/E of 14, below sector norm. It’s benefiting directly from the AI boom with solid 31% revenue and 33% net income growth last year—not to mention an impressive 81% operating margin. Much of the SA market would struggle with Tesla's valuation, especially when the rand could weaken on a global tech stumble. Investors looking at the JSE might find indirect comfort in a rationally priced tech play like Micron rather than chasing hype. If demand for chips cools or AI disappoints, Micron’s momentum could falter, so caution is warranted. this is just our opinion and not financial advice
Avoid Tesla due to stretched valuations and uncertain catalysts. Consider global tech exposure via Micron for steady growth and profit, keeping an eye on USD/ZAR as a risk factor.
- MU
- TSLA
- USD/ZAR
- AI investment disappoints, hitting chip demand
- Rand volatility increasing foreign currency pressures
6/10
The article argues that Micron Technology is a better investment than Tesla. Tesla trades at an extremely high P/E ratio of 345 (14x its sector average) with slowing growth and compressed margins, while its AI and robotics businesses remain unproven. Micron, despite a 500% stock surge, trades at a P/E of just 14 (below sector average) and is already profiting significantly from the AI boom with strong revenue and earnings growth. Analyst sentiment also favors Micron, with 80% rating it a strong buy versus mixed views on Tesla.
Our take is based on reporting first published by The Motley Fool.