Tesla Stock 'Could Fall 90% Tomorrow,' Fund Manager Still Won't Buy — Here's Where He's Investing Instead

Tesla Inc TSLA stock has fallen 8% year-to-date in 2025 and some investors and analysts believe the stock remains overvalued with more room to fall.

One of the top-performing fund managers thinks Tesla stock could have significant downside ahead.

Tesla Overvalued: When it comes to electric vehicles, Tesla may be a market leader and one of the top names in the sector.

When it comes to looking at stocks with attractive prices, T. Rowe Capital fund manager David Giroux is more than avoiding Tesla stock.

"Tesla could fall 90% tomorrow, and I wouldn't buy a share, because it's just crazy overvalued," Giroux told Barron's.

The comments were among those from Giroux at the Barron's July Roundtable when discussing the second half of 2025 outlook.

Tesla wasn't the only stock targeted by Giroux for being overvalued in his comments to Barron's.

"Palantir, I wouldn't buy a share – crazy overvalued. Costco Wholesale – 49 times earnings, Walmart, 37 times – doesn't make any sense."

Giroux also called Palantir Technologies PLTR, Costco Wholesale Corporation COST and Walmart WMT stocks overvalued, mostly based on price-to-earnings ratios.

Tesla currently trades at a price-to-earnings ratio of around 200, significantly higher than many automotive and technology stocks.

When it comes to betting against stocks, Giroux isn't shorting the stock, just avoiding it in the funds he manages, which comes as Tesla CEO Elon Musk has warned those shorting the stock.

Read Also: Tesla Q2 Earnings Highlights: Revenue And Earnings Fall Short; New Models Still Set For 2025–2026

Giroux's Strong Returns: When it comes to stock picks, Giroux is one of the top performers with the T. Rowe Capital Appreciation Mutual Fund (PRWCX) returning an annual average of 11.9% over the past 15 years. The fund has beaten 99% of its category peers, according to Barron's.

The fund closed to new investors back in 2014, but T. Rowe is now having Giroux manage several other investment vehicles that are open to new investors.

Giroux is now also running the T. Rowe Price Capital Appreciation Equity ETF TCAF, the T. Rowe Price Capital Appreciation and Income Mutual Fund (PRCFX) and the T. Rowe Capital Appreciation Premium Income ETF TCAL.

Giroux's Stock Picks: With Giroux speaking to Barron's and also being the fund manager of several mutual funds and ETFs, there are various places to find stocks that he thinks are not overvalued and good bets.

In July, some of Giroux's favorite stock picks were:

• UnitedHealth Group UNH
• Cigna CI
• Becton Dickinson BDX
• Aurora Innovation AUR
• Cytokinetics Inc CYTK
• NiSource Inc NI
• CenterPoint Energy CNP
• Ameren Corporation AEE

The Aurora Innovation pick could be a good tradeoff for investors looking for exposure to the autonomous vehicle space outside of Tesla. The company is a developer of autonomous trucks and Giroux sees more upside ahead.

"Asset utilization, especially on longer trips, could be twice that of a traditional truck. The economics are massively compelling. Trucking companies that don't adopt this technology will lose market share," Giroux said.

A review of the T. Rowe Capital Appreciation Equity ETF reveals the following stocks as its top 10 holdings, which may also include some of Giroux's top picks, primarily in the technology sector.

1. Microsoft Corporation MSFT: 9.6% of assets
2. NVIDIA Corporation NVDA: 7.0% of assets
3. Amazon.com Inc AMZN: 7.0% of assets
4. Apple Inc AAPL: 5.4% of assets
5. PTC Inc PTC: 3.0% of assets
6. Advance Micro Devices AMD: 2.9% of assets
7. Becton Dickinson: 2.8% of assets
8. Alphabet Inc Class A GOOGL: 2.6%
9. NiSource Inc: 2.6% of assets
10. Roper Technologies ROP: 2.6% of assets

Read Next:

• T. Rowe Price Launches Global ETFs To Nudge Investors Out Of Their Comfort Zone

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