We recently published a list of Top 10 Stocks to Buy According to Adage Capital Management. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other top stocks to buy according to Adage Capital Management.
Adage Capital Management, based in Boston, is a major investment firm specializing in managing the broader market’s assets, with a strong focus on Endowments and Foundations. Among its prominent clients are institutions such as Harvard University, Dartmouth College, Northwestern University, the American Red Cross, and the Getty Foundation. Over the last 15 years, Adage and its predecessor, the Select Equity Group at Harvard Management Company, have consistently surpassed the wider market’s performance by an average of 3.5%.
The firm’s origins date back to the mid-1980s when co-founders Phillip Gross and Robert Atchinson met as investment analysts for Harvard’s endowment. In the 1990s, following controversy over large performance bonuses at Harvard Management, they, along with an 18-person team, left to establish Adage Capital Management. Their launch was backed by a $1.8 billion initial investment from Harvard, with an agreement that the university would receive 10% of Adage’s earnings.
Adage Capital Management primarily manages the broader market’s assets for endowments and foundations, utilizing a long/short equity strategy driven by fundamental analysis. The firm also explores risk arbitrage and event-driven investment opportunities when suitable.
Phillip Gross, more commonly known as Phill Gross, co-founded Adage Capital Management, L.P. in 2001 and serves as a Managing Director and Healthcare Portfolio Manager. Before establishing the firm, he spent 18 years at Harvard Management Company, Inc., where he held roles as a Healthcare and Retail Analyst, Equity Research Director, and Partner.
Gross earned both his B.S. in finance and economics in 1982 and M.S. in investments in 1983 from the University of Wisconsin. He previously served on the UW Foundation Board of Directors and is currently involved with the Steve Hawk Center for Applied Securities Analysis Advisory Board and the Nicholas Center for Applied Corporate Finance Advisory Board. In 2006, he was honored with the Distinguished Alumnus Award from the UW Business School.
In philanthropy, Gross co-founded Strategic Grant Partners, an initiative aimed at systemic change in education and family services in Massachusetts. He serves as Vice President of the Board of Directors for Youth Enrichment Services, a Boston-based organization that introduces urban youth to outdoor activities. Additionally, he is a Board Trustee of the U.S. Ski and Snowboard Association, vice-chair of its Investment Committee, and a board member of the T2 Foundation.
Adage Capital Management’s Q4 2024 13F filing reported $57.19 billion in managed 13F securities, with its top 10 holdings accounting for 31.7% of the total portfolio. This distribution highlights the firm’s diversified investment approach.
Our Methodology
The stocks discussed below were picked from Adage Capital Management’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from over 1,000 hedge funds tracked by Insider Monkey in the fourth quarter of 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 as of Q4: 126
Adage Capital Management’s Equity Stake: $1.04 Billion
Tesla, Inc. (NASDAQ:TSLA) is facing a rough start to 2025, with its stock plummeting over 15% on March 10, bringing its total losses for the year to more than 40%. The steep decline erased approximately $127 billion from the company’s market value, wiping out all the gains it had made since Donald Trump’s election victory in November. Meanwhile, Chinese EV competitors like BYD and Xpeng saw stock gains, with Xpeng even announcing plans to mass-produce a flying car by 2026. Tesla, Inc. (NASDAQ:TSLA) continues to struggle in China, where its February sales plunged 49% year-over-year, partially due to production halts ahead of a Model Y update. In contrast, BYD’s sales surged 161%, closing in on Tesla’s position as the world’s largest EV seller.
Elon Musk’s standing in China, once bolstered by his early investments in the country’s EV sector and his strong relationship with Chinese officials, may be weakening. His recent political statements, including controversial claims about COVID-19, have sparked backlash on Chinese social media. The China Passenger Car Association even issued a rare comment, warning that Musk’s political ties could hurt Tesla, Inc. (NASDAQ:TSLA)’s sales. Additionally, his support for Trump is damaging the company’s reputation in Europe, with declining sales in markets like Germany and France. While Chinese tech stocks are surging due to new AI breakthroughs and government backing, Tesla, like many U.S. tech companies, is suffering from market instability, tariffs, and economic uncertainty under the new administration.
In its most recent quarterly report, Tesla, Inc. (NASDAQ:TSLA) achieved mixed financial results for Q4 2024, with net sales increasing 2.15% year-over-year to $25.71 billion. However, operating profit declined significantly by 23.3% to $1.58 billion, while earnings per share fell short of expectations at $0.73, missing analyst forecasts by 4.8%. These figures highlight the company’s ongoing financial pressures, as it navigates production challenges and heightened competition in the global EV market.
Overall, TSLA ranks 7th on our list of top stocks to buy according to Adage Capital Management. While we acknowledge the potential for 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.
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.
