8. Tesla, Inc. (NASDAQ:TSLA)
Year to Date Return: -9.50%
Number of Hedge Fund Holders: 85
Tesla, Inc. (NASDAQ:TSLA) is one of the worst-performing blue chip stocks in 2024; the company has come under scrutiny amid soaring competition in electric vehicles. While the introduction of robotaxi was expected to bolster the company’s sentiments, that was not the case.
The electric vehicle giant stock is down by about 9.50% for the year, underperforming the S&P 500, which is up by about 24%. Macroeconomic challenges have hampered Tesla in recent quarters. The company has repeatedly lowered prices to increase demand because inflation and high interest rates have suppressed consumer car spending.
With a 17.6% market share in sales of battery electric vehicles as of July, Tesla, Inc. (NASDAQ:TSLA) was the industry leader. However, compared to last year’s time, its market share decreased by 3.3 percentage points. Net income in Q2 fell 43% to $0.52 per diluted share, operating margin fell 3.3 percentage points, and revenue rose 2% to $25.5 billion.
However, according to Tesla, Inc. (NASDAQ:TSLA), its next big development will be autonomous driving technology. Customers can already purchase subscriptions to its full self-driving (FSD) software. Musk told CNBC last year that FSD software could increase Tesla’s gross margin to 70%, which would be almost four times higher than it was in the most recent quarter. Crucially, Tesla’s data advantage makes it one of the businesses most suited to profit from autonomous driving technology. Compared to other automakers, it has a significantly larger amount of FSD data—roughly 1.6 billion miles—and a large amount of high-quality data is necessary to train the deep learning models that give FSD software the ability to make decisions.
In total, 85 hedge funds were long Tesla, Inc. (NASDAQ:TSLA) in the second quarter, with a total stake value of $4.9 billion.
Here is what ClearBridge Small Cap Value Strategy stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q2 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) manufactures electric vehicles, related software and components, and solar and energy storage products. The stock contributed as Tesla continued to drive vehicle manufacturing costs lower, accelerate the launch of new models, and invest heavily in its lucrative AI initiatives. Shareholders reaffirmed the CEO’s compensation plan, alleviating personnel and legal uncertainties. Despite material operational complexities resulting in significant shutdowns of key manufacturing facilities and lower sales volume, Tesla presented better-than-expected margins in the quarter. It expects to launch a lower cost model as soon as late 2024, which should result in accelerated revenue growth, reduced manufacturing costs, and increased factory utilization. The company continued to advance its autonomous driving capabilities, expanding its already significant data centers and developing its humanoid robot Optimus. These investments increased confidence in the attractive growth opportunities that remain ahead.”
