Tesla is one of themost valuablecompanies on the planet. It is also a chronic underperformer.

How that’s possible tells investors something about how to trade its shares.

Coming into Friday trading, Tesla stock has trailed the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average over the past five years. Shares of the electric-vehicle maker are up about 59% over that span, just behind the Dow, about 20 percentage points behind the S&P 500, and roughly 50 points behind the Nasdaq.

It doesn’t feel like that, though. Part of the reason for that is volatility. Tesla stock is up more than 100% off its 52-week low reached in April.

That volatility can be valuable. The ability to add shares after deep declines and then see them roar back can take most of the sting out of the initial decline.

Another reason Tesla doesn’t feel like an underperformer is that something big is always happening there. CEO Elon Musk is a master of focusing on what’s next. From electric vehicles to affordable electric vehicles to self-driving cars to even humanoid robots, Tesla and its shareholders are always looking out for the next big thing.

That focus on the future might be why the stock can be up more than 27,000% from its 2010 IPO and still underperform the market for large stretches. Tesla’s stock revalues and sits at new plateaus every time it achieves one of its big goals, such as launching the best-selling car, electric or otherwise, in the world, an achievement of Tesla’s Model Y.

The next big things for Tesla stock are robo-taxis and robots. Robo-taxis might already be priced into the stock. Tesla is valued at some 200 times its estimated 2026 earnings, partly because it successfully launched a robo-taxi service in Austin, Texas, in June.

To be sure, investors expect the service to expand in 2026. That will be important for the stock. Musk said Tesla removed safety monitors from the cars in Austin on Thursday. That’s some progress.

Next up is robots. Along with using AI to train cars to drive themselves, Musk wants to use AI to train robots to do useful tasks. When, or if, Tesla creates a useful robot, shares will revalue again.

Less volatility and more consistent execution wouldn’t hurt. Future Fund Active ETF co-founder Gary Black acknowledges that Tesla stock doesn’t follow “normal growth stock norms,” but still would like earnings to grow more consistently.

He had been a longtime shareholder, but Tesla’s trading dynamics led him to sell all of his position at around $360 in 2025. He wants a price in the mid-$200s to go back in. He might get it. Although it might be a better idea to stay invested in Tesla stock—at an appropriate level—and wait for the next big development.

Tesla stock dropped 0.1% on Friday, closing at $449.06, leaving shares up 2.6% for the week. The S&P 500 finished flat on Friday, and the Dow Jones Industrial Average dropped 0.6%.

Coming into Friday trading, Tesla stock was flat on the year and up 8% over the past 12 months.