1. Tesla, Inc. (NASDAQ:TSLA)
Market Capitalization as of September 5: $673.206 billion
Number of Hedge Fund Holders: 85
Tesla, Inc. (NASDAQ:TSLA) has firmly positioned itself as a leading force in the EV and renewable energy sectors, continually pushing the boundaries of innovation and production capabilities. Known for its EVs powered by high-performance lithium-ion batteries, the company is significantly expanding its battery manufacturing capacity. It tops our list of the biggest lithium stocks to buy right now.
It is currently investing $3.6 billion in a new battery factory in Nevada, aimed at producing its larger 4680 battery cells. By mid-2023, the company had already manufactured over 50 million of these advanced cells at its Gigafactory in Texas.
This expansion is expected to meet the growing demand for its Cybertruck, which alone requires about 7 GWh of battery capacity annually. During the Q1 earnings call, the company’s Vice President of Vehicle Engineering, Lars Moravy, noted that the production of 4680 batteries has increased by 18% to 20% from the previous quarter, and this upward trend is expected to continue.
Moreover, Tesla’s (NASDAQ:TSLA) focus on vertical integration is evident in its $1 billion investment in a new lithium refinery in Texas. The refinery is designed to produce battery-grade lithium hydroxide using a novel, acid-free process that avoids hazardous chemicals. The refinery will process various lithium feedstocks, including recycled batteries, and is expected to have a production capacity of 50 GWh of battery-grade lithium per year. Elon Musk has referred to this facility as a “money-printing machine,” which highlights its expected impact on the company’s battery supply chain and cost structure.
In addition to its advances in battery production, the company continues to make strides in autonomous vehicle technology and other sectors. Morgan Stanley has expressed optimism about the long-term potential of autonomous vehicles to revolutionize transportation networks. Despite cautioning investors to manage expectations in the short term, the firm sees the company as its “Top Pick” in the U.S. auto industry.
The firm mentioned that the company is focused on improving its core auto business. It is also expanding into stationary energy, computing infrastructure, and robotics, integrating artificial intelligence into various aspects of its operations. The firm maintained an Overweight rating on the stock with a $310 price target.
As of the second quarter, 85 hedge funds tracked by Insider Monkey had stakes in Tesla (NASDAQ:TSLA), with positions worth $5 billion. Catherine D. Wood’s ARK Investment Management emerged as the company’s largest shareholder as it owns a $1.05 billion stake in the stock, as of June 30.
Baron Partners Fund 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.”
While we acknowledge the potential of Tesla, Inc. (NASDAQ:TSLA) to grow, 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 NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
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