10 Best Stocks to Buy and Hold For 3 Years

6. Tesla Inc. (NASDAQ:TSLA)

Number of Hedge Funds: 99

Tesla Inc.  (NASDAQ:TSLA) is one of the best stocks to buy and hold for 3 years. It is one of the pioneers in the electric vehicle industry. It creates various fully electric cars, including popular models like the Model 3, Model Y, Model S, Model X, and the Cyber Truck. It also designs products related to solar energy including energy storage systems like the Powerwall (for homes) and Megapack (for larger applications), which store energy for later use.

The company delivered approximately 462,890 vehicles in Q3 2024, marking a significant increase from the previous year and setting a record for third-quarter volumes. It also benefited from other automakers’ struggle to meet emissions standards and marked the second-highest revenue from regulatory credits. More importantly, the cost of goods sold (COGS) per vehicle dropped to around $35,100, the lowest level ever for the company.

The company is making significant advancements in its Full Self-Driving (FSD) technology, claiming a 1,000-fold improvement in critical interventions within the software this year. It plans to launch an unsupervised version of its FSD software and introduce a ride-hailing service in California and Texas by 2025. This will be a significant development for the company because as per Grand View Research, FSD vehicle sales are expected to reach $214 billion by 2030, and the management believes the technology can take the company’s gross margins to 70%.

Polen Focus Growth Strategy stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q3 2024 investor letter:

“The largest relative detractors during the quarter were Apple, Airbnb, and Tesla (not owned). We’ve spoken at length about our rationale for not owning Tesla, Inc. (NASDAQ:TSLA). In short, the market seems to be pricing in a lot of positive optionality for this company in the near-to-intermediate term (and particularly a fully autonomous fleet of electric vehicles in the medium term). What exists today is an automobile manufacturer limited to the higher-income segment that is increasingly challenged to sell vehicles when interest rates are not zero. We continue to question the company’s long-term growth profile and governance.”