10 Hot Growth Stocks to Invest in According to Analysts

4. Tesla, Inc. (NASDAQ:TSLA)

% Gain Over 6-Month Period: ~32.4%

Average Upside Potential: ~43.4%

Number of Hedge Fund Investors: 126

Tesla, Inc. (NASDAQ:TSLA) is engaged in designing, developing, manufacturing, leasing, and selling EVs, and energy generation and storage systems. Morningstar believes that the company’s strong brand cachet as a luxury automaker commands premium pricing. At the same time, its EV manufacturing expertise enables it to make vehicles cheaper than its competitors. Tesla, Inc. (NASDAQ:TSLA) is well-placed to disrupt the broader automotive and power generation industries with the help of its technology for EVs, AVs, batteries, and solar generation systems. Furthermore, the company’s full self-driving software is expected to help it achieve profit growth over the coming years with the improvement in technology, resulting in higher adoption by Tesla drivers as well as licensing from several other auto manufacturers.

Furthermore, Tesla, Inc. (NASDAQ:TSLA)’s investments in Al and autonomous driving technology are expected to create significant value over and above its core automotive business. The Robotaxi service is expected to revolutionize urban transportation and offer the company a lucrative new business model. Apart from this, with the world transitioning to renewable energy sources, the demand for efficient energy storage solutions can significantly grow. Tesla, Inc. (NASDAQ:TSLA)’s Powerwall and Megapack products place it well to capitalize on these evolving trends in both residential and utility-scale markets.

Baron Funds, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles, related software and components, and solar and energy storage products. Shares rose on growth in the energy segment, the promise of new model launches in 2025, and increasing investor confidence in Tesla’s AI initiatives. Despite macroeconomic challenges, delivery data in major markets like China have shown considerable improvement. The energy and automotive segments demonstrated stronger-than-expected profitability. Tesla also expanded its advanced computing center in Texas, released improved version of its software-enhanced driving solution, and is set to launch new mass market vehicles years after the initial rollouts of Models 3 and Y. Expectations of deregulation under the incoming administration point to the potential acceleration of new technology rollouts, which could enhance Tesla’s leadership position in real world AI and bolster investor confidence that Tesla will benefit from these large and attractive growth opportunities.”