1. Tesla, Inc. (NASDAQ:TSLA)
ARK Investment Management’s Q3 Stake Value: $1.2 billion
Number of Hedge Fund Holders: 99
Tesla, Inc. (NASDAQ:TSLA) is a leading manufacturer of fully electric automobiles and energy solutions. Cathie Wood labeled Tesla Inc. (NASDAQ:TSLA) as the world’s largest AI opportunity last year due to the release of its newest iteration of self-driving (FSD) technology, which the investor claims has the potential to revolutionize the company’s economics. For that very reason, ARK Invest published a report in June of 2024 that set a $2,600 price target for Tesla shares by 2029.
On January 30, Mizuho reaffirmed its Outperform rating for Tesla (NASDAQ:TSLA), reflecting its faith in the company’s standing in the market, especially as the top provider of electric vehicles in the U.S. With the Cybertruck and Optimus serving as long-term growth engines, the firm thinks Tesla is well-positioned to handle the possible loss of tax benefits and tariffs. Nevertheless, Mizuho cautions that competition in China remains a challenge for Tesla.
Tesla Inc. (NASDAQ:TSLA) reported its fourth-quarter and full-year financials for 2024, which revealed an annual revenue of $97.15 billion. Although its gross margin of 18.23% fell short of analyst forecasts, the automaker maintained strong financials with over $2 billion in free cash flow.
Aristotle Atlantic Large Cap Growth Strategy stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q4 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) detracted from performance in the fourth quarter of 2024. The stock had a strong performance in the fourth quarter, and our portfolio has an underweight position relative to the benchmark weight. Tesla reported better-than-expected third quarter earnings in late October. Given the CEO of Tesla’s position as an advisor to President-elect Trump, performance in the shares accelerated following the U.S. presidential election. There are expectations that regulation for autonomous driving will be centralized with the federal government. There have been reports in the press that tax incentives for electric vehicles will be eliminated or reduced, which could have a negative impact on Tesla’s subscale competitors.”
While we acknowledge the potential of TSLA, our conviction lies in the belief that certain 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: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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