10 Trending AI Stocks on Investors’ Radar

3. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 99

Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives. On January 30, Daiwa analyst Jairam Nathan maintained their neutral stance on the stock, giving a “Hold” rating. Nathan has assigned a hold rating on the stock due to intense pressure on Tesla’s operating margins. Reporting its earnings call on January 29, the company had a weak fourth quarter with a GAAP operating margin of 6.2%, falling short of expectations. One of the reasons for this weakness has been a 7% quarter-over-quarter decline in revenue per unit, despite an increase in deliveries. Moreover, even though Tesla managed to reduce direct costs, the decline in automotive and energy storage gross margins led to overall margin pressure.

Despite the weak quarter, investors were able to relax a bit after CEO Elon Musk vowed to launch long-awaited cheaper models in the first half of 2025 and also begin testing an autonomous ride-hailing service in June. Jairam Nathan also pointed to this optimism, noting improvements in Tesla’s Full Self-Driving (FSD) Technology. This advancement, together with affordable EVs and robotaxi trials, will support Tesla’s valuations. Nevertheless, margin challenges and uncertain pricing and volume have led to a cautious outlook.