Wall Street Is Sleeping on This Artificial Intelligence (AI) Stock, and That's Your Opportunity

There’s an odd thing occurring in the market right now: Tesla is no longer being valued as an automotive stock. It’s not even being valued as an electric vehicle (EV) stock. Instead, it’s clear that the market now thinks of it as an artificial intelligence (AI) stock.

Tesla’s valuation now exceeds $1 trillion, and shares trade at more than 13 times sales. Compare that valuation to an EV competitor like Rivian Automotive (RIVN +0.66%) — which trades closer to 3 times sales with a market cap under $20 billion — and you can quickly understand how different the market thinks Tesla is right now.

That’s especially true when you consider that its auto sales have been declining for years, and yet its valuation remains sky high. Tesla is now considered to be a bona fide AI business.

Rivian is now trying a similar transition, and if it succeeds, its valuation should improve dramatically. There are two things in particular that investors should understand before jumping into this potential monster stock.

1. Rivian is going all in on AI

Tesla has sent a strong signal to the market that it is serious about its ambitions. Earlier this year, it invested $2 billion in Elon Musk‘s AI start-up, xAI. And much of its $20 billion capital expenditure plan for 2026 will be dedicated to AI. “We’re making big investments for an epic future,” Musk told investors in January.

Although Rivian has far fewer financial resources, late last year the company announced it would be holding its first AI Day last December. From the start of November through December, shares spiked by nearly 80%.

When its AI Day arrived, the company announced a slew of new updates, including plans to accelerate the technology’s adoption in its factories and inject more AI functions into its vehicles. Management also said it will more aggressively pursue full self-driving capabilities through AI innovations, and it even has a plan to produce its own chips in the long term. In short, Rivian is going all in on the technology, so much so that the company no longer plans to reach profitability next year due to elevated investment needs.

2. Rivian’s AI journey begins with its R2 SUV

The biggest opportunity for Rivian in AI is arguably the robotaxi market, which many experts believe will eventually be worth several trillion dollars.

AI is helping advance self-driving capabilities faster than ever before. And other companies are already buying into Rivian’s vision. The company has a multibillion-dollar deal with Volkswagen and recently signed a deal to supply up to 50,000 R2 SUVs to power Uber Technologies‘ robotaxi fleet.

The company should begin deliveries of its new R2 SUV to employees this month. Deliveries to the public should scale up over the coming months.

As the EV maker’s first vehicle priced under $50,000, the R2 can help Rivian achieve mass scale better than any of its previous luxury-priced models. This opens up more opportunities to sell vehicles to robotaxi operators like Uber, while also giving the company much greater access to real-world driving data — which could be used to advance the company’s AI models.

So while Rivian’s AI journey is just beginning, the R2 launch this month should provide another tangible advance on the company’s path toward becoming a bonafide artificial intelligence stock like Tesla.