Ark Invest Stock Portfolio: Top 10 Picks

1. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Investors  in Q1 2024: 74

Ark Investment Management’s Q2 2024 Stake: $1 billion

Tesla, Inc. (NASDAQ:TSLA) is one of the most diversified car companies in the world. While its primary line of business is making and selling electric cars, it has also positioned itself well to benefit from any growth in renewable energy storage and artificial intelligence. Tesla, Inc. (NASDAQ:TSLA) is one of the earliest movers in the AI industry courtesy of its assisted driving software FSD’s reliance on machine learning to help users with their driving needs. Tesla, Inc. (NASDAQ:TSLA)’s latest quarter saw it reap the benefits of this diversification, as while its automotive revenue dropped by 7% annually to sit at $21.2 billion, energy storage doubled and grew by 100% to sit at $1.5 billion. However, this still makes Tesla, Inc. (NASDAQ:TSLA) an EV stock, and this brings with it the complexities of having to deal with the dependence on consumer purchasing power, the lithium supply chain, and tough competition in markets such as China.

Additionally, Tesla, Inc. (NASDAQ:TSLA)’s Elon Musk made some telling comments during the Q2 2024 earnings call where he shared that he had no choice but to compete with NVIDIA due to the tight GPU supply chain:

“Yes, so Dojo, I should preface this by saying I’m incredibly impressed by NVIDIA’s execution and the capability of their hardware. And what we are seeing is that the demand for NVIDIA hardware is so high that it’s often difficult to get the GPUs. And there just seems this, I guess I’m quite concerned about actually being able to get state-of-the-art NVIDIA GPUs when we want them. And I think this therefore requires that we put a lot more effort on Dojo in order to have — in order to ensure that we’ve got the training capability that we need. So we are going to double down on Dojo, and we do see a path to being competitive with NVIDIA with Dojo. And I think we kind of have no choice because the demand for NVIDIA is so high and the — it’s obviously their obligation essentially to raise the price of GPUs to whatever the market will bear, which is very high. So, I think we’ve really got to make Dojo work and we will.”

TSLA remains Cathie Wood’s favorite stock as of Q2 2024. But our conviction lies in the belief that some 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: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and 10 Best of Breed Stocks to Buy For The Third Quarter of 2024 According to Bank of America.

Disclosure: None.