Jim Cramer Is Talking About These 10 Stocks Heading Into December

2. Tesla Inc (NASDAQ:TSLA)

Number of Hedge Fund Investors: 99

Jim Cramer in a recent program made the case that investing in Tesla Inc (NASDAQ:TSLA) stock just because of Donald Trump’s possible support is a “bad reason” as he believes allowing EVs and related infrastructure all over the country won’t be simple for the upcoming government.

“I’m not against owning Tesla, you know that. I just think that this is a bad reason. Elon Musk tells a very compelling story about full self-driving as well as solar robots, all wrapped up in one stock of a company that happens to make vehicles. But the idea that the White House can somehow allow self-driving cars everywhere with the stroke of a pen, that’s just plain fanciful.

First, our country simply doesn’t work like that. We have state and local governments with tremendous power to block anything. I remember when I was going to be able to take a self-driving taxi from downtown Phoenix to Glendale, the home of the Arizona Cardinals, a couple years ago for the Super Bowl. It seemed so simple, except Glendale didn’t allow self-driving vehicles. I was incredulous, but the municipal government of Glendale was able to block us.

Second, you might think it’s natural for Trump to just declare the federal interstate highway system a self-driving zone, but you know what? That’s meaningless too. Think about it—how do you get on the interstate highway system? Other than a few municipalities that may be designated on some map someday, it’s catch-as-catch-can. The feds can’t control state or local self-driving laws. If they try it, those municipalities will sue the Federal Highway Administration, and they’re going to win.”

Cramer said Tesla Inc (NASDAQ:TSLA) does not need an “Elon Musk premium” as he believes the “Tesla premium” is enough to justify investing in the stock.

“Tesla’s a tech company; the others are automakers. And a tech company can get an insanely high price-to-earnings multiple with no one blinking so much as an eye about it.”

Polen Focus Growth Strategy stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q3 2024 investor letter:

“The largest relative detractors during the quarter were Apple, Airbnb, and Tesla (not owned). We’ve spoken at length about our rationale for not owning Tesla, Inc. (NASDAQ:TSLA). In short, the market seems to be pricing in a lot of positive optionality for this company in the near-to-intermediate term (and particularly a fully autonomous fleet of electric vehicles in the medium term). What exists today is an automobile manufacturer limited to the higher-income segment that is increasingly challenged to sell vehicles when interest rates are not zero. We continue to question the company’s long-term growth profile and governance.”