We recently published a list of 11 Stocks That Will Go to the Moon According to Reddit. In this article, we are going to take a look at where Tesla Inc. (NASDAQ:TSLA) stands against other stocks that will go to the moon according to Reddit.
Saira Malik, Nuveen’s Head of Equities and Fixed Income, recently joined CNBC’s ‘Closing Bell’ on February 18 to discuss opportunities outside the tech sector and her outlook for the markets. She began by addressing the two primary factors driving markets this year: technology and tariffs. Malik highlighted that while tech stocks have dominated the narrative, recent developments, such as DeepSeek’s announcement, have raised concerns about the immense spending in AI and the uncertainty surrounding its monetization and returns. Malik emphasized looking beyond tech to areas like infrastructure. She mentioned utility companies as a promising investment. When asked about momentum stocks, Malik explained that the momentum trade has propelled markets over the past few years, with the S&P 500 delivering over 20% annual gains during that period. However, this growth was largely concentrated in the MAG7, which resulted in an S&P 500 valuation premium of 20% above historical averages entering this year. She noted that the momentum trade is now unwinding, partly due to inflated expectations around AI and the lack of productivity gains despite tens of billions of dollars spent in the space.
Malik pointed out that international markets are outperforming US markets this year. European markets, in particular, entered 2025 with a 40% valuation discount compared to US markets and have a more cyclical bias. She stated that year-to-date returns suggest investors would benefit from owning international equities. While she expects the S&P 500 to post about 7% earnings growth for 2025 (following a strong Q4 with 12% year-over-year earnings growth), she believes international markets may continue to outperform due to their discounted valuations and cyclical exposure. Malik concluded by emphasizing the importance of being selective in this market environment. She recommended focusing on smaller mid-cap companies with profits, lower leverage, reduced refinancing risks, or economic sensitivity. Sectors like financials could thrive if deregulation or increased mergers and acquisitions activity materialize. She advised investing in stocks with upward earnings estimate revisions rather than those facing downward adjustments to capitalize on current market conditions.
Methodology
We first sifted through threads and posts on WSB and similar subreddits to compile a list of the top trending stocks among retail investors. We then selected the 11 stocks that analysts were bullish on and had an average upside potential over 40% as of March 3. We also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Tesla Inc. (NASDAQ:TSLA)
Upside Potential as of March 3: 40.62%
Number of Hedge Fund Holders: 126
Tesla Inc. (NASDAQ:TSLA) designs, manufactures, and sells EVs and energy solutions globally through its Automotive and Energy Generation and Storage segments. It utilizes direct sales, online platforms, and channel partners to reach customers. It’s also focusing on accelerating the world’s transition to sustainable energy.
On February 25, Morgan Stanley’s Adam Jones reiterated an Overweight rating for this company with a $430.00 price target. The firm noted that the company’s integration of AI and robotics will drive growth and innovation. Therefore, the company’s primary focus remains its Full Self-Driving (FSD) and autonomous vehicle technology. In Q4 2024, it achieved an annualized vehicle delivery rate of nearly 2 million, and the Model Y was the top-selling vehicle globally in 2024. Tesla Inc. (NASDAQ:TSLA) plans to launch unsupervised FSD in Austin by June 2025, and potentially expand it to other US regions by year-end. It’s already using autonomous vehicles at its Fremont factory.
The company is receiving interest from other car manufacturers in licensing FSD technology, but will prioritize high-volume partnerships. Tesla Inc. (NASDAQ:TSLA) believes autonomous vehicles will drastically increase usage, potentially from 10 hours per week to 50-55 hours. It’s now working to resolve battery pack constraints to support production growth.
Baron Partners Fund Baron Partners Fund is highly optimistic about Tesla Inc.’s (NASDAQ:TSLA) growth, driven by strong performance in energy and automotive, advancements in AI, upcoming vehicle launches, and potential regulatory tailwinds. Here’s what is said in its Q4 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles, related software and components, and solar and energy storage products. Shares rose on growth in the energy segment, the promise of new model launches in 2025, and increasing investor confidence in Tesla’s AI initiatives. Despite macroeconomic challenges, delivery data in major markets like China have shown considerable improvement. The energy and automotive segments demonstrated stronger-than-expected profitability. Tesla also expanded its advanced computing center in Texas, released improved version of its software-enhanced driving solution, and is set to launch new mass market vehicles years after the initial rollouts of Models 3 and Y. Expectations of deregulation under the incoming administration point to the potential acceleration of new technology rollouts, which could enhance Tesla’s leadership position in real world AI and bolster investor confidence that Tesla will benefit from these large and attractive growth opportunities.”
Overall, TSLA ranks 2nd on our list of stocks that will go to the moon according to Reddit. While we acknowledge the growth potential of TSLA, our conviction lies in the belief that AI stocks hold great promise for delivering high 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.
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Disclosure: None. This article is originally published at Insider Monkey.