We recently published a list of the 10 Best Machine Learning Stocks to Buy Now. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other machine-learning stocks.
Grand View Research reported that the global machine-learning market was valued at $36.73 billion in 2022. It’s now expected to grow at a 34.8% CAGR from 2023 to 2030. Machine learning helps machines and systems learn from experience instead of through explicit programming. It uses algorithms to improve and analyze vast amounts of complex data to make informed decisions. Machine learning is quickly progressing as AI is rapidly expanding and transforming how businesses and individuals operate. These technological advancements are revolutionizing consumer experiences, and enabling convenient creation of digital services, products, and optimized supply chains. With this, startups can focus on specific solutions while larger companies can deliver comprehensive AI platforms.
On April 10, Amazon CEO Andy Jassy joined CNBC’s ‘Squawk Box’ to discuss the cost of AI and what has to happen to bring it down. Jassy emphasized that the growth in data center demand is now so significant that there is no foreseen attenuation here, even with ongoing macroeconomic uncertainties under tariffs. While there’s a general belief that the emergence of DeepSeek could now reduce the need for extensive data centers, processing power, and energy consumption previously forecasted at different tech companies, Jassy thinks that DeepSeek’s introduction did not disrupt any of this. Despite cost reductions that occurred have already over time, AI deployment still requires significant investment. He thinks that the current AI operations are expensive due to chip costs and other factors, but big techs, including his own company, would welcome any reductions in AI costs for customers moving forward.
Jassy underscored the demand for data centers despite tariff impacts and reflected optimism regarding lowering costs, which would potentially drive innovation and expanded use of AI across industries. AI is still limited and requires substantial human oversight as of now but it has massive potential across various sectors.
Our Methodology
We sifted through ETFs and financial media reports to compile a list of the top ML stocks. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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
Tesl,a Inc. (NASDAQ:TSLA) is an EVs, and energy generation & storage systems company. Its Automotive segment offers EVs, supercharging, and vehicle insurance services. The Energy Generation and Storage segment designs, manufactures, and installs solar products. The company uses machine learning for autonomous driving, as well as for analyzing the data collected from its vast vehicle fleet.
The company’s FSD and Optimus are currently driving its growth, with Optimus expected to generate over $10 trillion for the company in the long term. The unsupervised rollout of FSD is planned for June 2025 in the Austin, Texas facility. Wider US deployment is expected by the end of 2025. While internal Optimus rollout is planned for 2025, its external sales will begin in 2026. The company aims to increase production from 1000 units/month to 10,000 units/month after external sales begin. The cost will potentially come down to $20,000 or lower when the production capacity is 1 million units/year.
On March 21, Morgan Stanley lowered the price target for Tesla, Inc. (NASDAQ:TSLA) from $430 to $410, while keeping an Overweight rating. Analysts think that despite falling short of anticipated performance, the company has an overarching thesis. They believe that the company’s transition from an automotive-focused business to a broader AI and robotics business is hurting its financials in the short run, but are setting the company up for growth potential ahead.
Nightview Capital stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q4 2024 investor letter, viewing the company as a leader in real-world AI:
“Artificial intelligence is no longer just a promise—it’s becoming the defining force of the modern economy. From self-driving vehicles to humanoid robotics, intelligent systems are not only enhancing efficiency but unlocking entirely new markets. These systems process and learn from vast amounts of real-world data, iterating and improving at a scale no human could achieve.
In our view, this isn’t just innovation; it’s exponential evolution. Companies leading the AI revolution are building formidable data moats, making it nearly impossible for latecomers to compete. Every mile driven by an autonomous vehicle, every task completed by an industrial robot—these actions feed a cycle of continuous improvement.
Industries like transportation, healthcare, and logistics are on the brink of massive disruption, and we believe this is a pivotal moment.
Tesla, Inc. (NASDAQ:TSLA): Core Opportunity: As highlighted in our 3Q investor letter, we believe Tesla’s leadership in real-world AI continues to be underestimated by the market. After a period of relatively flat growth, we see Tesla at the cusp of the next S-curve of transformation, driven by advancements in autonomous driving, energy storage, and electric vehicles. These multi-trillion-dollar markets offer Tesla a unique, integrated growth trajectory unmatched by competitors…” (Click here to read the full text)
Overall, TSLA ranks 6th on our list of the best machine learning stocks to buy now. While we acknowledge the growth potential of TSLA, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.