10 Best Self-Driving Technology Stocks To Buy According to Hedge Funds

3. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Investors In Q3 2024: 99

Tesla, Inc. (NASDAQ:TSLA) is a leading player in the autonomous driving industry and one of the hottest firms in the sector. Its FSD assisted driving platform is among the industry leaders in America, and FSD’s success is also baked into the firm’s hypothesis. Through FSD and its Cybercabs, Tesla, Inc. (NASDAQ:TSLA) aims to unlock new markets and diversify away from being an EV manufacturer. Consequently, the firm has to deliver on these fronts or see trouble with the share price as was evident in October after the stock fell by 9% after Tesla, Inc. (NASDAQ:TSLA)’s Cybercab event failed to impress investors with the specifics. However, the stock is up by a whopping 52% since the November election due to CEO Elon Musk’s proximity with President-elect Donald Trump and the market’s belief that this can generate positive catalysts for Tesla, Inc. (NASDAQ:TSLA). The firm also benefits from having 1.3 billion miles of data to train autonomous systems and computing resources to crunch its algorithms.

Baron Funds mentioned Tesla, Inc. (NASDAQ:TSLA) in its Q2 2024 investor letter. Here is what the fund said:

“As discussed in the Fund’s prior shareholder letter, the fears about Tesla’s products were misplaced. Instead of the company being exclusively dependent on limited vehicle models and software advancement, the company announced it will more rapidly introduce products that appeal to a wider audience. It also demonstrated that its price reductions were the result of efficiencies rather than only to spur demand. Margins exceeded expectations. And the company’s integration of its hardware with proprietary AI software should facilitate full self-driving capabilities and subsequent new revenue streams. This integration of hardware with software creates a dynamic growth company as it more fully explores its potential with Optimus, humanoid robotics. The combination of these catalysts resulted in Tesla’s stock increasing meaningfully and rapidly in the second half of the quarter. This stock price momentum has continued into the next period.”