10 Best Car Stocks To Invest In Now

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1. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 99

Tesla, Inc. (NASDAQ:TSLA) is an American automotive and clean energy company, headquartered in Austin, Texas. It is a pioneer in the EV industry and has significantly contributed to the global shift toward sustainable transportation through its electric cars.

As of the close of day on December 26, its market value has swelled by 87% since Trump’s election victory in early November, which has lifted Tesla back into the elite club of companies having a market cap of $1 trillion.

The company’s CEO, Elon Musk, spent a whopping $277 million on Trump’s election campaign and is set to lead the Department of Government Efficiency under the new administration, which will give him the ability to eliminate inconvenient regulations. Investors are also expecting Tesla, Inc. (NASDAQ:TSLA) Robotaxi and FSD technology to drive another phase of growth for the company.

Tesla’s financial performance also remains strong. During Q3 2024, it reported a revenue of $25.18 billion, up 8% from last year, driven by strong growth in vehicle deliveries. EPS was logged at $0.72, beating forecasts of 58 cents per share.

The company also experienced improved profit margins during the quarter, fueled by automotive regulatory credit revenue of $739 million. Automakers are mandated to obtain a certain amount of regulatory credits every year and often purchase them from companies like Tesla if they fail to meet the target themselves. Since it only manufactures electric vehicles, Tesla, Inc. (NASDAQ:TSLA) has excess credits.

Looking ahead, Musk expects vehicle growth between 20% and 30% next year, due to the advent of autonomy and the lower cost of vehicles. He is also confident about Cybercab reaching volume production in 2026, aiming for at least 2 million units a year.

Tesla is the best car stock to invest in now, with 99 hedge funds having investments in the company, according to Insider Monkey’s database for Q3 2024.

Overall, TSLA ranks first among the 10 Best Car Stocks To Invest In Now. While we acknowledge the potential of car companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TSLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock

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