We recently compiled a list of the 10 AI Stocks You Need to Watch: News & Ratings. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against the other AI stocks.
Nvidia’s annual software developer conference, GTC, is in full swing. With its latest announcements, the company is doing all it can to assure investors of its dominance in the rapidly evolving artificial intelligence industry. On Tuesday, CEO Jensen Huang delivered a keynote address in front of a packed hockey stadium in San Jose, California.
He noted how he believes that humanoid robots are less than five years away from wide use in manufacturing facilities. In this regard, he unveiled software tools that would reportedly help humanoid robots navigate the world more easily. Huang talked about humanoid robots when asked what signs would show that AI had become ubiquitous.
Huang said it may be “when, literally, humanoid robots are wandering around, which is not five years away. This is not five-years-away problem, this is a few-years-away problem.”
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Huang asserted that the manufacturing industry is probably going to be the first to adopt humanoid robots. This is because it has well-defined tasks that robots can easily handle in a controlled environment.
“I think it ought to go to factories first. And the reason for that is because the domain is much more guard-railed, and the use case is much more specific. The value of it is very, very easy to determine. The going rate for renting a human robot is probably $100,000 and I think it’s pretty good economics.”
The chipmaker’s CEO reportedly has big plans for the AI data center industry too. Debuting silicon photonics networking systems, Huang noted that their Spectrum-X and Quantum-X photonics can join hundreds and even thousands of GPUs, enabling data center companies to deploy up to 1 million GPU clusters.
Huang further noted how those million cluster data centers will be connected to other million-dollar data centers nearby to form massive data center facilities.
“Over the next several years, we’re going to be building giant AI factories. Not normal AI factories … ones you see from space.”
The GTC keynote also talked about the company’s latest advancements, from Spectrum-X and Quantum-X photonics to Blackwell Ultra and Vera Rubin Superchips, which are going to help customers operate powerful AI systems to drive better revenue opportunities.
“AI factories are directly related to revenue, and if the throughput is not good, your revenue is hurt. If you don’t have enough capacity, your revenue is hurt. If you’re not producing something of great value … your revenue is hurt.”
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024.
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 Fund Holders: 126
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives. On March 19, Baird kept an “Outperform” rating and a $370 price target on the stock. After hosting investors for a tour of Tesla’s battery manufacturing line at the Texas gigafactory and a meeting with the IR team, the firm is more certain of its near-term bearish outlook and long-term positive view.
On that note, the firm maintains its “bearish fresh pick” designation on Tesla shares. It has deemed that the Model Y retool is “a big task,” lowering delivery estimates for both Q1 and Q2 and adjusting the firm’s full-year delivery mix to mirror the impacts of downtime for the Model Y Launch series.
“Regardless of the root cause, we believe fears regarding Musk’s impact on the Tesla brand happening alongside the re-ramp of Model Y production will fuel bear arguments regarding demand which creates a near-term overhang.”
Beyond this near-term outlook, the firm has identified several potential catalysts for Tesla through the end of 2025.
“In the long term, we view TSLA as a core holding and are positive on its AI strategy/ capabilities, Optimus/robotics, Dojo compute, manufacturing leadership, and the Energy business among others.”
Overall, TSLA ranks 5th on our list of AI Stocks you need to watch. While we acknowledge the potential of TSLA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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.
