1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 85
Tesla, Inc. (NASDAQ:TSLA) is the pioneer of the electric vehicle industry and has revolutionized the automotive and clean energy sectors. It specializes in designing, manufacturing, and selling BEVs, alongside offering advanced energy storage solutions and solar energy products.
It stands out as one of the world’s most valuable automakers and a leader in the EV market, influencing industry standards such as the North American Charging Standard (NACS) for electric vehicle charging. NACS has been used since 2012 and in 2022, the company opened it to other manufacturers, which led to widespread adoption among EV makers and charging networks.
In 2023, the company also announced the groundbreaking of its in-house lithium refinery in Corpus Christi, Texas, representing an investment of over $1 billion. The facility aims to improve the supply of battery-grade lithium hydroxide in North America.
All eyes are on Tesla (NASDAQ:TSLA) due to the upcoming robotaxi event on October 10. Analysts are keeping a close eye on it and many of them are considering it as a substantial event for the company.
As reported by The Fly, Analyst Colin Rusch from Oppenheimer expects that the company’s upcoming Robotaxi event will effectively highlight the company’s advancements in AI. Oppenheimer also believes that the company will illustrate how its investments in computing and software are creating unique advantages compared to its competitors.
However, the firm warned that the excitement surrounding the event might be hard to meet and that both supporters and critics of the company will find evidence to back their views. Oppenheimer currently rates Tesla’s (NASDAQ:TSLA) stock as Perform, indicating a neutral stance.
On the other hand, RBC Capital analyst Tom Narayan increased the price target on the stock to $236 from $234 with an Overweight rating. He emphasized that the company’s upcoming Robotaxi event is significant because it could show a business that accounts for $153 billion in revenue, making up 63% of the company’s overall value.
Narayan pointed out that the global Robotaxi market could reach $1.7 trillion in revenue by 2040, with several players like fleet operators, app providers, car manufacturers, and software developers competing for market share. The profit margins from these Robotaxi revenues are expected to be much higher than those of traditional car manufacturers.
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) 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.
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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