We recently published a list of 12 Best NASDAQ Stocks To Buy in 2025. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other best NASDAQ stocks to buy in 2025.
As 2025 began, King Lip, chief strategist and partner at BakerAvenue Wealth Management expressed his bullish outlook for tech stocks in 2025 during a CNBC interview. He underscored a strong belief in the continued outperformance of tech stocks in 2025, driven by robust earnings growth and ongoing investments in AI infrastructure. Here’s a short excerpt from our article on the 12 Best Technology Stocks to Invest In for the Long Term that covered this:
“…Lip was against the prevailing sentiment among investors that big tech has peaked and that funds should rotate into smaller stocks or other themes. He argued that the recent weakness in the tech sector is largely due to technical rebalancing rather than a fundamental downturn. He emphasized that cash is likely to flow back into leading tech stocks, as they are projected to deliver the highest earnings growth in 2025, with an anticipated earnings increase of over 20%.”
While acknowledging the high valuations of many tech stocks, he argued that they remain within acceptable historical norms. On January 9, Mark Avallone, president at Potomac Wealth Advisors, joined ‘The Exchange’ on CNBC to discuss why technology is the best sector to invest in right now. He asserts that above-target inflation will prevent the Fed from implementing further easing measures, countering the notion that higher rates are detrimental. He noted that market rates have surged to all-time highs, with a significant increase of 1,800 points since October 2023. Avallone emphasizes that tech stocks, particularly cash-flowing mega-cap and large-cap companies, have shown resilience against rising rates, attributing this to improved operational efficiencies and ongoing technology spending even in a slowing economy.
Avallone highlighted recent deal chatter in the tech sector, including Shutter Stock’s potential acquisition in the uniform space, reflecting growing interest in technology-driven solutions. He is optimistic about the incoming administration’s impact on economic efficiencies and stock performance, particularly for large-cap tech firms and mid-cap companies focused on innovation. He views Hilton favorably for its technological advancements in office management and cost efficiency. In the defense sector, he expressed confidence in Boeing’s growth potential, emphasizing that significant cuts to defense spending are unlikely and that advancements in tech will enhance military capabilities.
Methodology
We first sifted through the Finviz stock screener to compile a list of the top 20 NASDAQ for 2025. We then selected the 12 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 Q3 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Tesla, Inc. (NASDAQ:TSLA) manufactures electric vehicles, energy storage systems, and solar panels. Some of its popular electric cars include the Model 3, Model Y, Model S, Model X, and the Cyber Truck. Investor optimism in the company is growing due to advancements in AI, particularly in autonomous driving and robotics.
The company has achieved significant milestones, including a 1000x improvement in miles driven without human intervention for its Full Self-Driving (FSD) software since January 2024. Furthermore, there have been successful autonomous driving demonstrations involving 20 Cybercabs that operated without human intervention.
Its Optimus robot has also captured significant investor attention. Optimus is a humanoid robot under development by Tesla Inc. (NASDAQ:TSLA), which is designed to perform tasks that are dangerous, repetitive, or boring. It will come out in late 2025/early 2026. The company’s robotaxi, however, will be launched in mid-2025. It’s a fully autonomous vehicle designed to operate as part of a ride-hailing service. Bank of America’s John Murphy downgraded Tesla Inc. (NASDAQ:TSLA) to Neutral from Buy on January 7th, raising its price target to $490 from $400. While acknowledging potential catalysts like the robotaxi launch and Optimus updates, he cited high execution risk given its current valuation.
Overall, TSLA ranks 10th on our list of best NASDAQ stocks to buy in 2025. 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. 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.
