Tesla (TSLA 6.68%) and Apple (AAPL 6.25%) are both members of the “Magnificent Seven,” a group of seven large U.S. companies that have dominated the stock market over time. While Tesla and Apple remain popular picks with investors, most Wall Street analysts see downside in the former and upside in the latter.

• Among the 57 analysts who follow Tesla, the median target price is $307 per share. That implies 4% downside from the current share price of $320.
• Among the 50 analysts who follow Apple, the median target price is $236 per share. That implies 14% upside from the current share price of $207.

Wall Street analysts clearly see Apple as the best buy, at least over the next 12 months. But investors should focus on longer time horizons. Here are the important details.

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1. Tesla

The investment thesis for Tesla centers on large opportunities in electric vehicles (EV), autonomous driving, and humanoid robots. The company lost significant EV market share in recent months as CEO Elon Musk involved himself in politics, but that could change when more affordable models launch later this year. Also, Musk says his time with DOGE will drop “significantly” in May, which may restore the company’s ailing brand image to some degree.

More importantly, Tesla will launch its first autonomous ride-hailing service in Austin next month, entering a market currently dominated by Alphabet‘s Waymo. Tesla theoretically has an advantage in that its full self-driving (FSD) platform relies solely on cameras, rather than a more costly combination of cameras, lidar, and radar like Waymo’s robotaxis. Musk says Tesla will eventually capture “99% market share or something ridiculous.”

Additionally, Tesla is leaning on its artificial intelligence (AI) expertise to develop an autonomous humanoid robot called Optimus. The company expects thousands of robots to be working in its factories this year, which should improve operating efficiency. More importantly, the company could start selling Optimus models to other businesses as early as the second half of next year.

Wall Street expects Tesla’s adjusted earnings to grow at 15% annually through 2026. That makes the current valuation of 140 times earnings look wildly expensive. However, that estimate fails to account for substantial opportunities in autonomous driving and humanoid robots simply because heavy monetization of those products is likely several years away.

For context, Ark Invest believes autonomous ride-sharing platforms will generate $4 trillion in revenue in 2030, and Citigroup thinks humanoid robots will generate $1.1 trillion in revenue by 2040. Those catalysts leave room for Tesla’s earnings growth to accelerate in the future, perhaps substantially. Investors confident in that outcome should own this stock.

2. Apple

The investment thesis for Apple centers on its strength in smartphones. The company has cultivated a tremendous brand moat and pricing power through design expertise that spans hardware and software. The average iPhone sold for more than twice as much as the average Samsung smartphone in the first quarter. Apple also monetizes its installed base with adjacent services like iCloud storage, App Store advertising and fees, and Apple Pay.

Beyond that, the company has an opportunity to monetize AI with its Apple Intelligence platform, a set of features that adds elements of automation to everyday tasks like editing photos and writing emails. Apple Intelligence has so far failed to move the needle, but that could change with a smarter version of the personal assistant Siri that will reportedly launch later this year.

Importantly, Apple is battling two headwinds that may drag on earnings growth. First, while the company has shifted some iPhone production to India, most high-end models are still made in China, which exposes the company to sizable tariffs. Second, an antitrust lawsuit involving Alphabet may curb the amount of services revenue the company earns by granting Google Search default placement on its Safari browser.

Wall Street anticipates Apple’s earnings will increase at 6% annually through 2026. That makes the current valuation of 30 times earnings look expensive. Personally, I think the stock is overvalued at its current price. But my opinion may change if Apple makes substantial progress in monetizing AI or if tariffs wind up being much less severe than anticipated. But I plan to avoid the stock for the time being.