7. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 74
Tesla, Inc. (NASDAQ:TSLA) is a leading electric vehicle and renewable energy company based in the United States, with operations running internationally. The Automotive segment of the company offers electric vehicles, automotive regulatory credits, after-sale parts, and maintenance services. The company is one of the pioneers in autonomous vehicle technology and focuses on developing advanced driver assistance systems and is working towards developing fully autonomous self-driving cars.
CEO of the company, Elon Musk, who is also the richest man in the world has ambitions for the automation industry and has introduced “robotaxis” which would operate without a human driver. Tesla, Inc (NASDAQ:TSLA) is one of the best autonomous vehicle stocks and was held by 74 hedge funds during the Q1 of 2024, with total stakes worth $4.95 billion. ARK Investment Management is the top shareholder of the company with position worth $1.05 billion.
The company posted record quarterly revenues and profits in Q2 of 2024, despite increased competition in the EV market. Tesla, Inc. (NASDAQ:TSLA) was able to grow its revenue by 2% year-over-year to reach $25.5 billion and its total gross profits grew by 1% to reach $4.58 billion. The revenue growth was on the back of strong performance in the Energy generation and storage segment. In the second quarter, the company reached 9.4 GWh deployments resulting in revenue generation of more than $3 billion, indicating a 100% increase year-over-year.
The company was able to remain profitable on the financial front as well and generated $1.34 billion in free cash flow, a 34% increase from last year. Moreover, the company’s cash and cash equivalents and investments also grew 33% during the same time.
What sets Tesla Inc. (NASDAQ:TSLA) apart from its competitors is its advancements in the autonomous vehicle category. Management during the latest earnings call indicated having made significant progress in Full Self-Driving and Robotaxi, with version 12.5 beginning to roll out.
Moreover, the ambitions of management make Tesla, Inc. (NASDAQ:TSLA), what analysts call a “story stock”, where investors are willing to pay a premium not based on the current price but on what the company can achieve in the future. The company has been able to grow its top-line and bottom-line by 32% and 79% respectively during the past 3 years. 56 analysts have a consensus Buy rating on the stock, with their median price target of $225 presenting an upside of 17.33% from current levels.
Alger Focus Equity Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q1 2024 investor letter:
Tesla, Inc. (NASDAQ:TSLA) is an electric vehicle manufacturer with a technological lead in its large and rapidly growing addressable market. In our view, Tesla is a transportation company that is setting the pace for industry innovation. During the quarter, shares detracted from performance after the company reported fiscal fourth quarter results, where revenues and earnings missed analysts’ estimates. Weaker-than-expected automotive revenues were partly driven by a reduced average selling price, which was down 15% year-over-year. Moreover, management decided to forgo providing volume guidance, though they did acknowledge they are in a lower growth phase given the uncertain consumer environment particularly as it relates to high ticket purchases.
