1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Tesla, Inc. (NASDAQ:TSLA) is a leading electric vehicle company with key ventures in batteries and solar technology. It plans to invest $3.6 billion in Nevada to build a factory producing 4680 battery cells, essential for the Cybertruck, which requires around 7 GWh of battery capacity annually.
Additionally, the company is committing $1 billion to establish a lithium refinery in Texas, designed to sustainably produce battery-grade lithium hydroxide. This facility is expected to support 50 GWh of annual output, improving battery supply and reducing costs.
Tesla (NASDAQ:TSLA) CEO Elon Musk seems to have a close relationship with President-Elect Donald Trump which could prove beneficial for the company. Reports suggest that the Trump administration plans to prioritize creating federal regulations for self-driving vehicles. According to a Bloomberg report from November 17, this initiative would focus on easing restrictions through the Department of Transportation, aligning with Tesla’s (NASDAQ:TSLA) investments in autonomous technology. Current regulations limit the production and deployment of fully autonomous cars, but potential federal rule changes could support the company’s goals. Elon Musk has voiced support for nationwide policies enabling self-driving vehicle use.
Moreover, the market is anticipating that the President-Elect is likely to cancel the Inflation Reduction Act (IRA) EV tax credits, which Elon Musk is less worried about. In the company’s Q2 earnings call in July, Colin Langan of Wells Fargo asked Elon Musk about the potential impact on Tesla if the IRA was repealed under a Trump presidency. Langan noted Tesla benefits from EV subsidies and production tax credits for batteries.
Musk acknowledged that while losing IRA support would have some negative effects on Tesla, it would be far more damaging to competitors. Musk said:
“I guess that there would be like some impact, but I think it would be devastating for our competitors. But — and it would hurt Tesla slightly. But long-term probably actually helps Tesla would be my guess. Yes — but I’ve said this before on earnings calls, it — the value of Tesla overwhelmingly is autonomy. These other things are in the noise relative to autonomy. So I recommend anyone who doesn’t believe that Tesla will solve vehicle autonomy should not hold Tesla stock. They should sell their Tesla stock. You should believe Tesla will solve autonomy, you should buy Tesla stock. And all these other questions are in the noise.”
While we acknowledge the potential of Tesla, Inc. (NASDAQ:TSLA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TSLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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