<div id="readability-page-1"><div><div>When it comes to memes, Tesla Inc TSLA CEO Elon Musk is a fan. But when it comes to calling his electric vehicle company a &#34;meme stock,&#34; he's not amused. One investing expert, however, argues that Tesla deserves the meme stock label given its current valuation.What Happened: Tesla has often traded with a valuation higher than its automotive peers, a valuation that Ark Invest CEO Cathie Wood believes should be a reality.While experts argue whether Tesla should trade with a valuation of an automotive company or a technology company, the current valuation is significantly ahead of both sectors.Sharing thoughts on Musk's new compensation package, Yale School of Management Senior Associate Dean Jeff Sonnenfeld didn't hold back with the meme stock analogy.&#34;This is the biggest meme stock we've ever seen,&#34; Sonnenfeld said in an interview with CNBC.The investing expert highlighted the price to earnings ratio of Tesla being above 200. On Benzinga Pro, the PE ratio is 253.5x on a trailing twelve-month basis and 169.5x on a forward basis.&#34;Even at its peak, Amazon was nowhere near this level. The PE on this, well above 200, is just crazy. When you've got stocks like Nvidia, the price-earnings ratio is around 25 or 30, and Apple is maybe 35 or 36.&#34; Sonnenfeld said Tesla's valuation is &#34;crazy.&#34;&#34;They've, I think, put a little too much emphasis on the magic wand of Musk.&#34;Read Also: Tesla Stock Surged 1,350% After Musk’s Last Pay Plan—New Package Could Ignite Gains, Analyst Says Why It's Important: Asked about the new compensation plan for Musk, Sonnenfeld said it was &#34;foolish&#34; and &#34;reckless&#34; of the board and will turn into shareholders' problems.The investing expert said no one is worth $1 trillion in compensation. Sonnenfeld also said that if Musk leaves Tesla, as he hinted at as a potential without a higher ownership percentage, he would be the person most impacted if the stock went down.&#34;He'd be the biggest loser,&#34; Sonnenfeld said.In his interview, Sonnenfeld praised Musk’s talent and said there might not be anyone smarter or more entrepreneurial.&#34;He's a brilliant guy.&#34;As for the premium valuation, Sonnenfeld also warned against shorting the stock.&#34;People shorting haven't done well due to timing.&#34;Last month, Musk issued a warning to investors betting against the electric vehicle company.&#34;If they don't exit their short position before Tesla reaches autonomy at scale, they will be obliterated,&#34; Musk said, referring to a list of the top companies with short positions in the stock.Sonnenfeld said he hopes that a succession plan is laid out for Tesla with someone new ready to take the company into the next phase. The expert highlighted Tesla losing market share in Europe and China with BYD dominating in certain markets.&#34;There isn't a part of the world where Tesla isn't falling under Musk.&#34;The expert said it's time for Musk to move on and time for someone who &#34;won't cost a trillion dollars&#34; to lead the company.TSLA Price Action: Tesla stock was down 2.1% to $416.85 on Thursday versus a 52-week trading range of $212.11 to $488.54. Tesla stock is up 9.9% year-to-date in 2025. <ul> <li>Tesla Q2 Earnings Highlights: Revenue And Earnings Fall Short; New Models Still Set For 2025–2026 </li> </ul>Photo: Shutterstock</div></div></div>

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Tesla Inc. has been labeled a "meme stock" by Yale's Jeff Sonnenfeld, who criticized its high valuation and Musk's compensation package. With a PE ratio over 200, Sonnenfeld compared it unfavorably to tech giants like Nvidia and Apple. He warned that Musk's departure could negatively impact the stock and suggested a succession plan is needed as Tesla faces market share losses in Europe and China. Despite a 2.1% drop in stock price, Tesla is up 9.9% year-to-date in 2025.

- Tesla CEO Elon Musk is not pleased with the label of "meme stock," despite experts arguing that Tesla's high valuation warrants it.  
- Yale's Jeff Sonnenfeld criticized Tesla's price-to-earnings ratio, which stands at 253.5, significantly higher than competitors like Nvidia and Apple, calling the valuation "crazy."  
- Sonnenfeld expressed concerns over Musk's new compensation plan, suggesting it could lead to shareholder issues, and emphasized the need for a succession plan as Tesla faces market share challenges.

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Tesla 'The Biggest Meme Stock' Ever? Expert Says 'Too Much Emphasis On The Magic Wand Of Musk'