Tesla Vs. Nvidia: The Regulatory Crosshairs are Trained on These Two Mag 7 Shares, One is Worse Off
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Strong operating quarters were posted by Tesla (NASDAQ:TSLA | TSLA Price Prediction) and NVIDIA (NASDAQ:NVDA), and both are now drawing heavy attention in Washington. Tesla’s October 21 report leaned on FSD and Robotaxi. NVIDIA’s August 26 report showed AI demand exceeding supply. Since then, a midterm blue wave and a CEO scandal have changed the regulatory picture for both companies.
FSD Subscriptions Surge While NVIDIA Sells Every Chip It Can Build
Tesla’s revenue came in at $28.046B, down 0.17% year over year. With car sales flat, the growth story sits in software. Active FSD subscriptions reached 1.74M, up from 1.04M, so drivers are clearly paying for autonomy. The CFO put it simply: “FSD continues to be the key driver for demand.” That push costs money, though. R&D rose to $2.76B, and operating income fell 55.79%.
NVIDIA’s revenue rose 105.85% to $96.221B. Hyperscaler spending drove that growth, and the expansion reaches well beyond the chipmaker itself (we covered seven suppliers powering, cooling, and networking that infrastructure, and you can read it at no cost: here). Jensen Huang summed it up: “Now, compute is revenue.”
| Business Driver | Tesla | NVIDIA |
|---|---|---|
| Growth Engine | Robotaxi and FSD | Data Center computing and networking |
| Who Must Approve | Country and state regulators | U.S. export licensing |
| Operating Margin | 4.6% | 60.4% |
Tesla Needs Permission While NVIDIA Needs Leadership Clarity
After the election, an AV policy expert told Axios that hopes for federal rules overriding state limits “just became a pipe dream”. Axios noted that Democrats have cited safety and labor protections, and Texas elected a governor who once asked Tesla to delay its Austin launch. Elon Musk named the threat on the earnings call: “unless we are stopped by governments.” Traders put Robotaxis launching in California by year-end at just 3.3%.
NVIDIA has already removed China from its outlook. Its guidance excludes any Data Center compute revenue from China. The new risk is governance. The board is looking into Huang’s relationship with Alice Huang, who is affiliated with Megaspeed, an NVIDIA customer accused of helping restricted Chinese companies acquire its chips. The WSJ reports that the board is preparing to oust Huang. The stock has fallen 23.24% in a month.
EU Approval and NVIDIA’s China-Free Guidance Come Next
I will be watching for EU-wide FSD approval. Musk said he “would be surprised if it takes longer than Q1.” For NVIDIA, keep an eye on whether results meet the $108.0B revenue outlook without China. Power and shell capacity also limit how fast NVIDIA can ship.
Why I See Tesla Carrying the Heavier Regulatory Load
To me, Tesla is in the worse spot. NVIDIA’s problems come down to one executive and one country it has already left out of guidance. At about 21 times earnings, NVIDIA’s valuation leaves room for a leadership change. Near 417 times earnings, Tesla’s valuation carries a premium that depends almost entirely on regulators letting driverless cars expand. If Europe signs off by Q1 and Texas leaves Austin alone, my position would shift.
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Alex Sirois is a financial writer with experience spanning both retail and institutional investing. He has written for InvestorPlace and held roles at BNY Mellon and Bernstein, giving him a perspective that bridges Main Street portfolios and Wall Street analysis.
Alex holds an MBA from George Washington University and has built his career across multiple industries, including e-commerce, education, and translation — a breadth of experience that informs how he breaks down complex financial topics for everyday investors. His writing is conversational, actionable, and grounded in long-term, buy-and-hold investing principles.
At 247 Wall St., Alex focuses on delivering analysis that is both accessible and useful, with a clear emphasis on helping readers make more informed decisions with their money.
