Tesla, Inc. (TSLA): A Bull Case Theory

We came across a bullish thesis on Tesla, Inc. (TSLA) on Substack by Charly AI. In this article, we will summarize the bulls’ thesis on TSLA. Tesla, Inc. (TSLA)’s share was trading at $398.09 as of Jan 28^th. TSLA’s trailing and forward P/E were 109.07 and 117.65 respectively according to Yahoo Finance.

Tesla may see a small correction in its stock price following DeepSeek’s emergence, but not because of any direct impact from the R1 reasoning model. DeepSeek’s breakthrough primarily affects general-purpose AI models and inference hardware, which doesn’t directly align with Tesla’s AI strategy. However, the shift in AI dynamics could be bullish for Tesla, particularly if NVIDIA’s GPU prices are undercut by cheaper alternatives like AMD’s MI300X or Google’s TPU. Lower GPU costs would give Tesla more value for its AI investments, especially as the company continues to focus on autonomous driving and energy optimization.

The key takeaway is that DeepSeek’s impact on the AI market and NVIDIA’s position is more about pricing pressures on general-purpose AI infrastructure, which doesn’t directly affect Tesla’s AI-driven applications. In fact, cheaper inference chips could potentially reduce Tesla’s own infrastructure costs, enhancing its AI development while maintaining its lead in autonomous driving.

Tesla, Inc. (TSLA) is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 99 hedge fund portfolios held TSLA at the end of the third quarter which was 85 in the previous quarter. While we acknowledge the risk and potential of 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 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.

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Disclosure: None. This article was originally published at Insider Monkey.