We recently published a list of Jim Cramer’s Latest Portfolio: Top 10 Calls Before August. Since Tesla Inc (NASDAQ:TSLA) ranks 8th on the list, it deserves a deeper look.
Earlier this month, Jim Cramer during his program on CNBC talked about the importance of optimism right now and explained why he sees hope for America in the future.
Cramer said that the recent political violence made things look “dark” and “grim.” The CNBC host said this election year has been a “mess, something very much in sync with the tone of the country.”
However, Cramer referred to the recent comments from the CEO of the world’s largest investment manager, and said it seems the end of the world is “not on the table.” Cramer called the executive’s comments a “breath of fresh air” and agreed with the notion that the US economy needs more growth and less business regulation. Cramer said that America has a huge deficit problem but it cannot tax its way out of this.
“But we can grow our way out of it.”
Cramer said we should understand that capitalism is a “force for good, a force for wealth generation, not just for the rich, but for everybody, as long as they invest.”
Jim Cramer urged his viewers to invest in individual stocks.
“I don’t care what you invest in, as long as you invest.”
For this article we watched the latest programs of Jim Cramer and picked 10 stocks he’s talking about. With each stock we have mentioned hedge fund sentiment. 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).
Hadrian / Shutterstock.com
Tesla Inc (NASDAQ:TSLA)
Number of Hedge Fund Investors: 74
Talking about auto stocks in a latest program, Jim Cramer said that he doesn’t believe Tesla Inc (NASDAQ:TSLA) is an auto company because of its technology.
“I don’t regard Tesla Inc (NASDAQ:TSLA) as an auto company because of its technology. And I like it for tech.”
Amid a decline in EV sales growth, Elon Musk’s only option is to go all-in on AI. After a Twitter poll that overwhelmingly voted in favor of Tesla Inc (NASDAQ:TSLA) investing capital in xAI, Musk’s AI company, the CEO of Tesla said he’d discuss investing $5 billion in xAI with Tesla Inc (NASDAQ:TSLA).
Elon Musk said in a latest earnings call with analysts that massive discounts from Tesla Inc (NASDAQ:TSLA) competitors created headwinds for the company in the most recently reported quarter.
Tesla Inc (NASDAQ:TSLA) has also delayed its robotaxi event until October. All possible catalysts for Tesla stock lie far into the future and the reality is revealing itself to Elon Musk who admitted during the latest earnings call that he’s been overly optimistic about robo taxis.
“It’s difficult, obviously, my predictions on this have been overly optimistic in the past. So I mean, based on the current trend, it seems as though we should get miles between interventions to be high enough that — to be far enough in excess of humans that you could do unsupervised possibly by the end of this year. I would be shocked if we cannot do it next year.”
During the second quarter, Tesla Inc (NASDAQ:TSLA) automotive gross margin fell to 18.47% from 19.22% the previous year. Non-automotive revenue, now 22% of total sales compared to 14.67% in Q2 2023, has a lower gross margin, negatively impacting overall profitability. Tesla Inc (NASDAQ:TSLA) is still heavily reliant on EVs where demand is falling. Tesla energy business is not strong enough to offset declines in the core business.
Alger Focus Equity Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q1 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) is an electric vehicle manufacturer with a technological lead in its large and rapidly growing addressable market. In our view, Tesla is a transportation company that is setting the pace for industry innovation. During the quarter, shares detracted from performance after the company reported fiscal fourth quarter results, where revenues and earnings missed analysts’ estimates. Weaker-than-expected automotive revenues were partly driven by a reduced average selling price, which was down 15% year-over-year. Moreover, management decided to forgo providing volume guidance, though they did acknowledge they are in a lower growth phase given the uncertain consumer environment particularly as it relates to high ticket purchases.”
Overall, Tesla Inc (NASDAQ:TSLA) ranks 8th on Insider Monkey’s list titled Jim Cramer’s Latest Portfolio: Top 10 Calls Before August. While we acknowledge the potential of Tesla Inc (NASDAQ:TSLA), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. 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: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
