We recently published a list of Top 10 Stocks Analysts are Watching as AI Selloff Deepens. In this article, we are going to take a look at where Tesla Inc (NASDAQ:TSLA) stands against other top stocks analysts are watching as AI selloff deepens.
Major AI stocks are struggling to gain traction as investors rethink their strategies amid concerns of a slowdown in spending. Even top tech bulls are starting to use the word “bubble” for the AI trade. Gene Munster, Deepwater Asset Management managing partner, said in a latest program on CNBC that he believes we still have two years of the AI bull run before the bubble bursts.
“From a high-level perspective, I always return to the fundamentals as a tech investor. The fundamentals of these companies remain strong. I predict we have two good bullish years ahead before a spectacular bubble burst. When I see this, it shakes my confidence, but if I stay focused on the fundamentals, I still believe this trade will play out.”
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For this article, we picked 10 stocks analysts are currently talking about. With each company we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Tesla Inc (NASDAQ:TSLA)
Number of Hedge Funds Investors: 99
Steve Sosnick, Interactive Brokers chief strategist, said in a latest program on CNBC that retail traders have been net buyers of major Mag. 7 stocks including Tesla Inc (NASDAQ:TSLA). He believes retail traders do not want to miss any new buying opportunities amid selloffs.
“Nvidia remains the most actively traded and the most actively bought stock on our platform, Tesla being number two. These stocks brought them to the dance, and they’re not abandoning them.”
Analysts are still trying to look beyond Elon Musk’s claims and find out the specifics on the company’s EV and robo-taxi plans.
Tesla Inc’s (NASDAQ:TSLA) product lineup is showing signs of stagnation, with over 95% of sales still coming from the Model 3 and Model Y. Meanwhile, competitors are rolling out more advanced models. According to Reuters, Tesla’s market share in Europe is slipping as legacy automakers like BMW post stronger sales. Chinese competitor BYD is also gaining ground in Europe, despite talk of tariffs.
Baron Partners Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q4 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles, related software and components, and solar and energy storage products. Shares rose on growth in the energy segment, the promise of new model launches in 2025, and increasing investor confidence in Tesla’s AI initiatives. Despite macroeconomic challenges, delivery data in major markets like China have shown considerable improvement. The energy and automotive segments demonstrated stronger-than-expected profitability. Tesla also expanded its advanced computing center in Texas, released improved version of its software-enhanced driving solution, and is set to launch new mass market vehicles years after the initial rollouts of Models 3 and Y. Expectations of deregulation under the incoming administration point to the potential acceleration of new technology rollouts, which could enhance Tesla’s leadership position in real world AI and bolster investor confidence that Tesla will benefit from these large and attractive growth opportunities.”
Overall, TSLA ranks 5th on our list of top stocks analysts are watching as AI selloff deepens. While we acknowledge the potential of TSLA as an investment, our conviction lies in the belief that under the radar 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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Disclosure: None. This article is originally published at Insider Monkey.
