Jim Cramer Says You Should Buy These 10 Stocks

4. Tesla Inc (NASDAQ:TSLA)

Number of Hedge Fund Investors: 74

Cramer thinks Tesla Inc (NASDAQ:TSLA) has the potential to join the $1 trillion “club.” He said the company just needs to demonstrate that Tesla Energy could be a bigger piece of its business. Cramer said Tesla Inc (NASDAQ:TSLA) vehicle sales are “leveling off” after a period of decline, while its self-driving projects like robo taxis could be “the biggest thing going.” Cramer said China could be a big market for robo taxis.

“This thing got a lot of momentum.”

Tesla shares recently plunged after the company postponed its much-awaited robo taxi event until October. However, Tesla bulls say their core thesis remains unchanged.

Cathie Wood recently set a $2600 price target on Tesla Inc (NASDAQ:TSLA) for 2029, which present a whopping 1300% upside potential from the current levels. Wood thinks the robo taxi project has the potential to deliver $8 to $10 trillion in revenue by 2030.

However, many believe Tesla Inc (NASDAQ:TSLA) won’t be able to live up to the hype around its robo taxi plans. Each robo taxi is expected to have a price target of around $150K to $200K, with some estimates suggesting Tesla Inc (NASDAQ:TSLA) would need about $35 billion to develop a global feet of such cars. Amid inflation and lack of preference for electric cars, American families will probably stay away from spending a fortune on robo taxis, which could cause a blow to Tesla Inc’s (NASDAQ:TSLA) plans in the future.

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.”