3. Tesla, Inc. (NASDAQ:TSLA)
5-Year Revenue CAGR: 30.75%
TTM Net Income: $12.427 billion
Number of Hedge Fund Holders: 85
Taking the third spot on our list of most profitable growth stocks is Tesla, Inc. (NASDAQ:TSLA), a leader in the electric vehicle sector, mostly for transforming the automotive and clean energy industry. The company focuses on the design, production, and sale of battery electric vehicles, as well as providing advanced energy storage systems and solar products.
The company made significant noise in the market at the “We, Robot” event on October 10. The CEO, Elon Musk unveiled two innovative vehicles, the Cybercab and the Robovan. The former is a car with no steering wheel or pedals while the latter is shaped like a modern train buggy that can carry up to 20 passengers or transport cargo.
The Cybercab is projected to cost under $30,000 and is expected to be produced from 2026. Musk described this occasion as a pivotal moment for Tesla (NASDAQ:TSLA), comparable to the launch of the Model 3 in 2017.
Musk also emphasized significant advancements in the company’s humanoid robot, Optimus, which is designed to handle various everyday tasks. He projected that the robot could be priced between $20,000 and $30,000, making it potentially accessible for consumers.
He said that Optimus robots will be the company’s most significant product as he envisions a future where these personal robots do everyday tasks for owners. The robots were seen dancing at the event and serving drinks to the attendees.
He suggested that all the technologies that we have already seen are being used in the development of Optimus. He said, “It’s just a robot with arms and legs instead of a robot with wheels. And we’ve made a lot of progress.”
Following the event, Wedbush reiterated its Outperform rating and a $300 price target on Tesla (NASDAQ:TSLA). The firm expressed optimism about its autonomous vehicle strategy, especially the Cybercab, which they found highly impressive in person.
The firm believes that Cybercab could become a $10 billion annual business for the company in the coming years. However, the firm highlighted regulatory, insurance, and launch challenges Tesla (NASDAQ:TSLA) must navigate for future growth.
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.”
