As of mid-September 2026, the year-to-date (YTD) performance for the major U.S. stock indices is as follows:
S&P 500:+10.81% (Price return) / +11.74% (Total return including dividends)
Nasdaq Composite:+11.79% (Price return)
Nasdaq-100:+14.61% (Price return)
Dow Jones Industrial Average (DJIA):+9.07% (Price return) [1, 2, 3, 4, 5]
Compare the major U.S. stock index returns to long term averages
A direct comparison of current year-to-date (YTD) stock market growth against historic tracking data proves that today’s market is operating at a perfectly healthy, standard historical pace.
While recent returns trail the unusually strong post-pandemic bull market stretch, they completely align with multi-decade annualized averages.
If the magnificent seven are in a bubble as some claim, which stocks are tanking
The “Magnificent Seven” are no longer moving in tight lockstep, exposing a massive fracture in the narrative that the entire group is a uniform bubble.
Instead of a broad, synchronized crash, the market is aggressively separating the winners from the losers based on real corporate earnings and their ability to immediately monetize massive Artificial Intelligence (AI) infrastructure capital expenditures. [1]
If you look beneath the surface to see what is actually “tanking” or dragging down the index, the damage is heavily concentrated in a few specific names, while the underlying broader market is quietly holding firm. [1, 2]
The Mag-7 Laggards: Who Is Actually Declining?
While the Roundhill Magnificent Seven ETF (MAGS) has actually managed a modest ~10.6% YTD gain—tracking slightly below or matching the broader S&P 500—certain individual members are absorbing heavy losses. [1, 2]
Tesla (TSLA): Down ~18% to 20% YTD
Tesla has been the worst-performing stock in the group. The market has increasingly stripped away its “tech premium,” trading it more like a traditional automotive manufacturer facing global EV oversupply, pricing wars, and unproven secondary business lines. [1, 2, 3, 4]
Meta Platforms (META): Down ~6.5% YTD
Meta has faced heavy skepticism regarding the massive capital expenditures funneling into its open-source AI models and metaverse initiatives. Because its AI benefits show up as internal infrastructure optimizations (like better ad targeting) rather than a direct, clear software subscription revenue stream, the market has punished its multiple. [1, 2, 3]
Microsoft (MSFT): Flat / Down (Peak-to-Trough)
Though trading relatively flat on a strictly price-only YTD basis (~+1.6%), Microsoft sits significantly lower than its previous all-time highs. A major “AI skepticism” rotation hit the stock as investors realized the sheer timeline required to generate free-cash-flow returns on the hundreds of billions of dollars poured into Azure data centers. [1, 2, 3, 4]
The Outside “Contagion”: High-Multiple Technical Stocks
If the core tech bubble argument holds true, the real capitulation isn’t just inside the Magnificent Seven; it is hitting the hyper-extended valuation layers built right underneath them: [1]
Enterprise AI & Cybersecurity Softening: High-flying stocks trading at astronomical price-to-earnings (P/E) multiples—such as CrowdStrike (CRWD) and Palo Alto Networks (PANW)—have faced sharp valuation resets when earnings or future guidance showed any minor sign of slowing down. [1]
Second-Tier Semiconductor Volatility: While hardware giants like Nvidia (NVDA) continue to beat forecast estimates, secondary chip components and alternative semi stocks like Advanced Micro Devices (AMD) have seen extreme volatility. The market is punishing businesses whose current valuations leave zero margin for infrastructure deployment delays. [1, 2]
The Silver Lining: “Market Broadening”
The broader S&P 500 isn’t crashing because money is undergoing a healthy structural rotation. Capital is exiting the hyper-valued tech monoliths and flowing directly into overlooked sectors like dividend-yielding value stocks, healthcare, and financials, which are projected to post stronger catch-up earnings growth through the end of the year. [1, 2]
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The above was a conversation with Google AI.
While my year started dismally (mostly TSLA but also some call option trades – live and learn) it has almost caught up with the NASDAQ composite, the best performing major U.S. stock index.
Fooldom Tesla bears are having a bash celebrating the newest Tesla Killer, Waymo! Tesla is down 27.2% from it’s all time high of $489.88 on Dec 16, 2025. In my opinion they are missing the phase change from EV revenues to embodied AI revenues generated by robotaxis and humanoid robots which, if it does happen, makes this a buying opportunity.
Pretty sure this is the same Ron Baron who gave Musk $40 million personally and $60 million from his fund to buy Twitter, and then had to mark it down by 70% on the same day his deal closed.
Of course everybody makes mistakes, but that’s kind of a whopper
Despite those losses, Ron has made roughly 21 billion to date between his investments in Tesla and Space X. Most importantly, Ron is a levelheaded investor and a wonderful American Success story. Starting with a negative net worth of $15k in 1970, he has amassed a personal fortune of over $6billion. Even in the downtimes, he never let a single employee go at Baron Capital.
Those that have listened to his advice and ignored the noise have benefited immensely from that financial wisdom. The Baron Funds have been long term outperformers vs the market. His last emphatic call to buy Tesla in April of 2024 has resulted in a more than double in terms of value in just two years.
His markdown of Twitter is a paltry one third of one percent of the other gains in tesla and space x combined. To date, it still represents a paper loss and the ultimate value of the business has yet to be determined. I’m not sure that making money was the real priority. Musk strongly felt that Twitter needed to function as the digital public square and Baron was more than willing to support that effort, regardless of the actual financial payoff.
Yes, that is exactly correct. You are thinking of Ron Baron, the billionaire founder of Baron Capital. [1]
Baron noted that he chose to invest anyway because Musk had already generated billions in profits for his clients through Tesla and SpaceX, making it a gesture of loyalty and friendship. Musk famously responded during the interview by calling Baron a “true and trusted friend” for supporting him when the chips were down. [1, 2]
I’m sure glad Musk took over Twitter! Thanks Baron!
As the Old EF Hutton ad use to say, when Ron Baron Speaks, I tend to listen. Besides, he is just an eternal optimist and those are always delightful to be around.
This is why I posted that cartoon on the other thread. If there’s someone who’s saying something that supports one’s opinion, our tendency is to accept them as a valid source of information. But if there’s someone who’s saying something that contradicts your opinion…well, there’s standards of evidence to be met, after all! There have to be tons of independent proof!
That may be well and true but alignment in view is not the sole determinant. Ron Baron has a long successful track record both at the fund level and specific to his investments with Musk. I don’t just believe anyone that agrees with my view. There has to be other corroborating reasons, including a track record of credibility. Despite Baron’s endorsement and optimism as to Space X, I still don’t own shares in it. I have my own conditions regarding profitability. As to the other thread, I’m only really suggesting to be mindful of the hysteria, which seemed to get lost in it all.
A similar hysteria occurred around Musk during the twitter purchase, DOGE and his political activism that it meant the downfall of the business. It turned out to be a nothing burger. Those that listened to Baron realized these were really non-events in the grand scope of things. And Yeah, I’m much more interested in what optimists have to say versus pessimists. It’s just a more interesting world and far more lucrative from a financial standpoint. Given those choices, how and with whom would you prefer to spend your time? “Pessimism sounds smart but Optimism builds Wealth” - Unknown
“Nothing burger” accurately describes Tesla’s business performance over the last three years. Sales are flat. Operating margins–once the envy of the industry–have been compressed down to typical car company margins. Profits are down, EPS is down, FCF has gone negative, market share is shrinking. The energy portion of the business is doing very well, but that’s a pretty small part of the company.
The Tesla bull case always comes down to “but the stock went up.” Yes it did. The price went all the way up to a P/E of 334. It is priced like a high growth company, but without any of the growth. Anyone else think that’s a little odd?
If the stock market were an escalator to Financial Heaven everyone would be rich but the Pareto Distribution says that only about 20% of investors beat the averages. Back in 1934 Graham and Dodd wrote the Investing Bible based mostly on the mathematics of bonds because back then bonds were investments while stocks were speculation, at least according to Graham and Dodd.
GoogleAI:
You’ve hit on a fascinating, foundational piece of financial history! Your observation is spot on: when Benjamin Graham and David Dodd published their legendary book Security Analysis in 1934, the entire backdrop of the financial markets was radically different from how we view it today. [1]
Having just survived the 1929 stock market crash and the deepest depths of the Great Depression, Graham’s philosophy was forged in a period of intense economic trauma. [1, 2]
Here is how that exact climate shaped their views on bonds versus stocks:
The Historical Reality of 1934
Bonds as the Standard: In the early 20th century, conservative investing was almost entirely synonymous with fixed-income senior securities (bonds and preferred stock). Bonds had legally binding covenants, contractually mandated interest payments, and a claim on physical assets if a company failed. Therefore, the “mathematics of bonds”—focusing heavily on asset coverage, earnings-to-interest ratios, and safety of principal—was considered the only true foundation for “investment”. [1, 2]
Stocks as Pure Speculation: Prior to the 1930s, common stocks were widely viewed as speculative vehicles or “gambles” on future growth, manipulated by market insiders. During the roaring 1920s, people bought stocks purely on price momentum and vague optimistic projections. When the market collapsed, those ungrounded valuations evaporated. [1, 2, 3]
How Graham & Dodd Rewrote the Rules
The genius of Security Analysis wasn’t just that it laid out bond math; it was that Graham and Dodd applied that exact same rigorous, bond-like discipline to common stocks. [1]
They famously drew a hard line between the two approaches:
“An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.” [1]
To turn stock buying from speculation into true investment, they looked at equities through a “bond-flavored” lens:
Focus on Liquidating Value: They looked for companies trading for less than their net current asset value (essentially, if the company went bankrupt tomorrow, what would be left for shareholders after paying off all debt?). [1]
The “Margin of Safety”: Just as a bond investor looks for a massive buffer between a company’s earnings and its interest obligations, Graham and Dodd argued that stock investors must buy a stock at a massive discount to its intrinsic value. This discount—the margin of safety—protects the investor from human error, bad luck, or market volatility. [1, 2, 3]
Ignoring the Hype: They treated a stock share not as a trading card to flip, but as a fractional piece of a real, physical business. [1]
By treating stocks with the strict mathematical skepticism usually reserved for bonds, they essentially grandfathered the concept of “value investing” into existence. [1]
Tesla, the company, does not behave like a bond, it is not “value investing” which means that trying to use Graham and Dodd to invest in Tesla is a non starter. From Graham and Dodd:
“An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.” [1]
EVs are not just cars, they are Paradigm Shifters trying to implement Climate Politics. Tesla is not resting on EV laurels but going to the next step, monetizing AI. Investors (speculators?) have to act accordingly. Not just a little odd, a different paradigm.
What does that mean? Why does the fact that they don’t emit CO2 directly make them something other than cars?
Tesla doesn’t have a generalized AI product. They have an AI driving product, trained on lots of driving data - but that has a finite application space. Namely, driving. They have rebranded their robotics efforts as “physical AI,” but there’s nothing to indicate that they’re doing much to monetize the "AI’ part of that. They’re building the shells, and the shells are advanced engineering, but there’s not much there about the brains to be put inside those shells. That work is over at SpaceX, which has xAI and the Grok chatbot.
“The Intelligent Investor” is a classic, but even Ben Graham moved away from that type of analysis as the market changed. Ben Graham’s disciple, Warren Buffett, did too. When that book was written Graham was looking for stocks that were priced below the breakup value of the company, of which there were a lot in the Great Depression. That hasn’t been true in a long time. So no, I wasn’t doing a classic Ben Graham-style analysis. Even Ben Graham stopped doing that.
I was thinking more along the lines of one of the greatest disruptors in our lifetimes: Amazon. In his very first shareholder letter, Bezos basically said revenue growth is better than profits. Amazon had no profits for several years, and when finally became profitable the P/E was in triple digits for many years, but it didn’t matter because revenue growth was so strong. As earnings slowed, the P/E dropped to double digits, and is now below 20 (still with good growth), which suggests the market had it priced pretty much right the whole time. So we can safely ignore P/E as long as revenue growth is sufficiently high.
But as written in Ecclesiastes, the one ironclad immutable rule of investing is the initial price determines your final return. It is entirely possible to overpay for a great company. Tesla is profitable, sells lots of cars, still a major player in the sector. But what is the final return likely to be at this price and little to no revenue growth?
Electric vehicles act as “paradigm shifters” because they link personal transportation directly to the transformation of the entire energy grid, shifting the burden of pollution reduction from individual tailpipes to centralized power production.
What “Paradigm Shifter” Means
Systemic Link: Traditional cars operate in isolation; burning gas creates local pollution regardless of where the fuel came from. EVs connect every car to the electrical grid. [1, 2, 3]
Policy Driver: Governments use EV adoption targets to force utility companies to generate cleaner, renewable electricity. [1, 2]
Shared Progress: As the power grid adds more wind and solar energy, every existing EV automatically becomes cleaner over time without requiring modifications from the owner. [1, 2]
Why Zero Tailpipe Emissions Change the Definition
No Direct Pollution: Battery electric vehicles have no tailpipe, meaning they release zero local exhaust emissions while being driven. [1, 2]
Energy Efficiency: EVs convert over 77% of electrical energy directly to power at the wheels, compared to only 12% to 30% for gasoline engines. [1, 2]
Moving the Source: While manufacturing and charging batteries still produce indirect emissions depending on the local energy mix, eliminating direct combustion fundamentally alters the vehicle’s environmental role from a mobile pollution source to a flexible electrical load. [1, 2]
GoogleAI:
Tesla’s transition from an electric vehicle manufacturer to an AI and robotics powerhouse is one of the most heavily debated topics on Wall Street and in the tech world.
While the skepticism regarding their current monetization and the specific scope of their AI is valid, Tesla’s strategy relies on the idea that vision-based spatial intelligence is the foundational “brain” required for both autonomous driving and humanoid robotics.
Here is a breakdown of where Tesla actually stands on monetizing AI, the boundaries of their current software, and the reality behind their “physical AI” push.
1. The Core AI Product: Full Self-Driving (FSD)
The argument that Tesla’s AI has a finite application space (driving) is accurate in terms of its immediate deployment, but Tesla views the software architecture as a generalized solution for spatial intelligence and navigation.
The Monetization Today: Tesla currently monetizes AI through its FSD software packages (either upfront purchases or monthly subscriptions) and is actively attempting to license this FSD stack to other major automakers.
The “Brains” Architecture: Tesla shifted its driving AI to an end-to-end neural network (FSD V12 and later). This means the AI processes raw video input and directly outputs control actions (steering, braking), replacing hundreds of thousands of lines of explicit, human-written code.
2. Translating “Driving Brains” into “Physical AI”
The skepticism around the Optimus humanoid robot just being an advanced mechanical “shell” touches on Tesla’s biggest current engineering hurdle. However, Tesla’s thesis is that the “brain” built for FSD is 80% transferable to a robot.
Tesla’s goal is to prove that a neural network trained to understand a 3D world from moving cameras can navigate a factory floor just as it navigates a highway.
3. Real-World Monetization vs. Speculation
Tesla’s path to broader AI monetization relies on transitioning from a product-sales model to a service-platform model.
The Robotaxis: The immediate monetization leap from “driving AI” is the creation of a supervised or unsupervised autonomous ride-hailing network. This leverages the existing vehicle fleet to generate high-margin software revenue.
The Optimus Timeline: As of now, Optimus is not broadly commercialized. Tesla’s internal strategy is to deploy these robots within their own Gigafactories first to perform repetitive manufacturing tasks. True commercial monetization (selling robots to other companies) remains a long-term milestone.
Ultimately, Tesla is betting that “embodied AI” (AI that interacts with the physical world) is a completely different market than the LLMs (Large Language Models like ChatGPT) built by OpenAI or Google. Whether their vision-first approach can successfully operate a robot’s hands as well as it operates a car’s steering wheel remains the ultimate test of their technology.
But what paradigm is being shifted? Don’t just ask AI. I’m asking you to explain it to me. How are EV’s shifting a paradigm compared to ordinary cars? Yes, they eliminated tailpipe CO2 emissions - but isn’t that it? What do you think is so fundamentally different that it means a paradigm shift?
I can understand that. But “navigating” within a factory is only a tiny part of what a robot needs to do in order to be useful. I will need to manipulate objects in the real world - to know about how much different objects weigh, how much force you need to use to hold them, how slippery/rough they are when you pick them up, how much they can bend or whether they are brittle, how much force to move them, etc. None of that is in FSD’s training data - the only thing that a car needs to do is move around and not touch anything in the environment.
Again, can you explain to me how the skills that FSD acquires can help a working robot with anything other than just moving from one point to another in the factory?
It’s a fair critique and long term, the share price is going to follow the earnings that can be produced by the business. What I was referring to were the surrounding noise and hysteria that seemed to at times move the share price or the predictions that Tesla was doomed because of this or that related to Musk.
The EV thesis around Tesla is changing but I continue to be a long term investor. The stock is undoubtedly expensive. I simply do not sell my long term winners because the price seems high. If the thesis materially changes, and it may, I might then have to reconsider the position. For now, I’m content to let it play out and see what unfolds with its various business opportunities, which seem significant.
It’s perfectly reasonable for others to take a pass for any number of reasons and risks.
The Mag-7 Laggards: Who Is Actually Declining?
Down ~18% to 20% YTD
Down ~6.5% YTD
Flat / Down (Peak-to-Trough)
The Outside “Contagion”: High-Multiple Technical Stocks
The Silver Lining: “Market Broadening”
