We recently published a list of 10 Best Stocks to Buy and Hold For The Next Decade. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against the other best stocks to buy and hold for the next decade.
Is Nuclear Energy Making a Comeback?
Nuclear plants continue to re-open, but the question stands, will the global supply be able to meet the ever-growing demand for clean energy? On October 1, Aniket Shah, Jefferies’ global head of sustainability and transition strategy, appeared in an interview on Yahoo Finance to discuss his stance on nuclear energy making a comeback amid the AI boom.
Shah shares that the nuclear energy boom is not surprising. Looking back, the United States signed significant partnerships to boost the supply of nuclear energy years ago, indicating that the value this sector holds is not unknown or recent.
He adds that the big tech companies are going to be primary catalysts and will influence the entire market. These companies will invest millions and billions in nuclear energy, making the transition easier for other companies to follow. According to Shah, some key investment areas would be small modular reactors and nuclear fusion.
Shah also acknowledged that the United States held a bipartisan view of the nuclear boom, explaining why regulations and acts in favor of nuclear energy are being passed at notoriously high speeds. While the building blocks of nuclear energy are coming together, Shah remains concerned over the execution. He highlights that the United States does not have enough skilled labor and resources to make the nuclear energy boom a reality and must work extremely hard to make it happen.
Nuclear Energy is Poised for Growth Amid AI Boom
One of the most opportunistic investment themes in 2024 is AI, the other is electrification, and both require a lot of power. The surge in power demand is in turn driving utility stocks. On October 4, Durgesh Chopra, Evercore ISI managing director, appeared in an interview on Yahoo Finance to discuss how utilities could benefit from AI-driven power demand.
Chopra highlights the biggest catalyst for companies like Vistra and Constellation Energy is data centers’ needs for a 24/7 source of clean energy. Therefore, nuclear companies must grab the opportunity and enter into long-term contracts to lock in future growth as soon as possible.
There are multiple projects in the pipeline in the United States, that add up to roughly 1.5 gigawatts of energy, positioning nuclear plants as the next big thing in energy. On the flip side, balancing supply and demand will be a key challenge for companies.
Despite the challenges, he believes that the market is well-positioned for growth in utilities. Utilities have not seen demand growth in the past decade, but things are finally changing for the sector. Overall, with inflation going down, the sector may experience significant tailwinds. Chopra also emphasized that growth in this sector will yield results in five to seven years.
Our Methodology
To come up with the 10 best stocks to buy and hold for the next decade, we sifted through multiple similar rankings and compiled an initial list of 20 stocks. We then ranked the top 10 based on their hedge fund sentiment at the end of Q2 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
25 Most In Demand Cars Heading into 2024
Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 85
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company specializing in producing electric cars and solar-integrated renewable energy solutions. The company is one of the largest EV manufacturers and accounted for nearly 50% of EV sales between April and June, in the United States.
Electric vehicles accounted for 84% of Tesla’s revenue in the second quarter of 2024, indicating its reliance on the industry. Its energy segment, logged $3 billion in sales, doubling year-over-year. The company avoided 20.4 million metric tons of CO2 with its initiatives in 2023, equivalent to 48 billion miles of driving.
During the second quarter of 2024, Tesla, Inc. (NASDAQ:TSLA) launched a new lineup of electric vehicles, to boost the launch of new models. Its new lineup and extensive production line will deliver over 3 million vehicles of capacity when optimized fully.
Despite sluggish growth in its electric vehicle segment, the company’s investments in AI make autonomous driving a reality, contributing to its position as one of the best stocks to buy and hold for a decade. In addition to AI-based self-driving and AI training chips, the company also made headlines for its Tesla Bot, a humanoid autonomous robot capable of performing miscellaneous tasks.
Tesla is poised for significant growth in the coming years because of its growing emphasis on AI and its stance on sustainability. Sustainability is a rapidly growing concern for economies and Tesla is on track to spearhead the movement.
Baron Funds mentioned Tesla, Inc. (NASDAQ:TSLA) in its Q2 2024 investor letter:
“As discussed in the Fund’s prior shareholder letter, the fears about Tesla’s products were misplaced. Instead of the company being exclusively dependent on limited vehicle models and software advancement, the company announced it will more rapidly introduce products that appeal to a wider audience. It also demonstrated that its price reductions were the result of efficiencies rather than only to spur demand. Margins exceeded expectations. And the company’s integration of its hardware with proprietary AI software should facilitate full self-driving capabilities and subsequent new revenue streams. This integration of hardware with software creates a dynamic growth company as it more fully explores its potential with Optimus, humanoid robotics. The combination of these catalysts resulted in Tesla’s stock increasing meaningfully and rapidly in the second half of the quarter. This stock price momentum has continued into the next period.”
Overall, TSLA ranks 8th among the 10 stocks to buy and hold for the next decade. While we acknowledge the potential of TSLA as an investment, our conviction lies in the belief that 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: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
