We recently published a list of 10 Buzzing AI Stocks This Week. In this article, we are going to take a look at where Tesla Inc (NASDAQ:TSLA) stands against other buzzing AI stocks this Week.
Paul Hickey, Bespoke Investment Group co-founder, said while talking to CNBC in a latest program that despite the market gains still concentrated in a few names, he’s bullish short and long term because of AI.
“The longer term play is the AI trade. This is an AI bull market. Every bull market has a theme, and ChatGPT was to AI what Netscape and AOL were to the internet.”
Hickey also mentioned the possible scenario where market gains would start to broaden out.
“ChatGPT didn’t invent AI; it made it tangible for consumers and businesses, just like Netscape with the internet. It caused, you know, made it a lot more practical on the part of businesses and the consumer. So I think in that respect, there’s a lot more investment to go, and we’ve seen the infrastructure stocks in AI benefit. But even just last week, some of these software names—and we’re going to slowly start to see that broaden out to the rest of the economy.”
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For this article, we picked 10 AI stocks currently buzzing on the back of latest news and analyst ratings. 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Tesla Inc (NASDAQ:TSLA)
Number of Hedge Fund Investors: 99
BofA Securities raised its price target on Tesla (NASDAQ:TSLA) to $400 from $350 and maintained its rating after a visit to its gigafactory in Austin, Texas.
“The visit gave us increased confidence that TSLA is well-positioned for growth in 2025 and beyond with its core EV business, the launch of its robotaxi offering, and its investments in Optimus,” said analyst John Murphy and his team.
The analysts also noted that Tesla Inc (NASDAQ:TSLA) has opportunities to improve margins, which are currently mainly driven by hardware, but will shift more towards margin-accretive software with the growth in FSD, premium connectivity, and charging.
BofA highlighted that Tesla Inc (NASDAQ:TSLA)’s Full Self-Driving (FSD) technology is expected to require an intervention only once every 10,000 miles, bringing it closer to the point where Tesla could safely launch its (monitored) robotaxi business. This compares favorably with Waymo, which requires an intervention every 17,000 miles.
Polen Focus Growth Strategy stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q3 2024 investor letter:
“The largest relative detractors during the quarter were Apple, Airbnb, and Tesla (not owned). We’ve spoken at length about our rationale for not owning Tesla, Inc. (NASDAQ:TSLA). In short, the market seems to be pricing in a lot of positive optionality for this company in the near-to-intermediate term (and particularly a fully autonomous fleet of electric vehicles in the medium term). What exists today is an automobile manufacturer limited to the higher-income segment that is increasingly challenged to sell vehicles when interest rates are not zero. We continue to question the company’s long-term growth profile and governance.”
Overall, TSLA ranks 8th on our list of buzzing AI stocks this Week. While we acknowledge the potential of TSLA, 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.
