We recently published a list of Israel Englander’s Stock Portfolio: Top 10 Stocks to Invest in. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other stocks to invest in from Israel Englander’s portfolio.
Millennium Management is a globally recognized investment firm specializing in multi-strategy hedge fund offerings. Founded in 1989, the firm has established itself as one of the largest alternative asset management firms. With headquarters in New York, Millennium Management has expanded its operations across North America, Europe, and Asia, with 18 primary offices in financial hubs such as London, Dubai, Singapore, and Tokyo. The firm employs a platform-based investment approach, consisting of approximately 330 investment teams operating under a decentralized model. These teams deploy diverse strategies across various asset classes, including equities, fixed income, commodities, and derivatives. Millennium’s core strategies encompass fundamental equity research, equity arbitrage, macroeconomic-driven fixed-income investments, and commodity-based trades. By leveraging a data-driven and diversified approach, the firm seeks to generate consistent, high-quality returns for its investors while effectively managing risk across global markets.
Millennium was co-founded by Israel A. Englander and Ronald Shear, both of whom had extensive experience in the American Stock Exchange (AMEX). The firm initially launched with $35 million in capital, with Englander contributing $5 million and securing additional investment from Canadian financiers, the Belzberg brothers. However, the firm faced early struggles, leading to Shear’s departure just six months after its inception. Despite these challenges, Millennium Management evolved into a powerhouse in the hedge fund industry, consistently ranking among the top-performing firms. Over the years, Millennium has adopted an institutionalized structure, attracting seasoned executives such as Bobby Jain, who served as co-CIO alongside Englander until his departure in 2023. By implementing a disciplined risk management framework and continuously refining its investment strategies, Millennium has remained at the forefront of alternative asset management.
Israel Englander, the driving force behind Millennium, has built a reputation as one of the most successful hedge fund managers in modern finance. A graduate of New York University, Englander pursued an MBA before leaving early to trade at AMEX, where he gained valuable experience in market-making and derivatives trading. His expertise and strategic vision enabled Millennium to grow rapidly, managing approximately $13 billion in assets by 2011. In recent years, Englander has explored opportunities to sell a minority stake in the firm, signaling a shift towards institutional ownership. His approach to hedge fund management prioritizes capital allocation to specialized teams rather than making direct investment decisions himself. This model has allowed Millennium to maintain a highly competitive edge, attracting top talent and fostering a dynamic investment environment.
Millennium’s outstanding performance has positioned it as one of the most successful hedge funds globally. As of Q4 2024, the firm reported $204.64 billion in managed 13F securities, with its top ten holdings comprising 15.5% of its portfolio. Notably, Millennium has consistently ranked among the highest-grossing hedge funds, posting the fourth-largest net gains of any fund since its inception. Its commitment to risk-adjusted returns, diversification, and strategic innovation has earned it a strong reputation among institutional investors. With a proven track record, an expansive global presence, and a disciplined investment approach, Millennium Management continues to be a dominant force in the hedge fund industry.
Our Methodology
The stocks discussed below were picked from Millennium Management’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1,008 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
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)
Number of Hedge Fund Holders as of Q4: 126
Millennium Management’s Equity Stake: $794.26 Million
Tesla, Inc. (NASDAQ:TSLA), headquartered in Austin, Texas, generates revenue through multiple streams, primarily from its automotive and energy businesses. The majority of its earnings come from vehicle sales, which include the design, manufacturing, and sale of electric models such as the Model 3, Model S, Model X, and Model Y, along with leasing, used vehicle sales, retail merchandise, insurance, energy generation, vehicle servicing, non-warranty after-sales services, and public charging. Another key source of income for Tesla, Inc. (NASDAQ:TSLA) is from the sale of carbon and automotive regulatory credits, further diversifying its financial portfolio.
Tesla’s Q4 2024 earnings report showed mixed results, with net sales rising 2.15% year-over-year to $25.71 billion, and operating profit falling 23.3% to $1.58 billion. Earnings per share of $0.73 missed analyst expectations by 4.8%. Despite a stock rally fueled by speculation of policy benefits under President Trump’s administration, Tesla, Inc. (NASDAQ:TSLA) faced significant challenges, including its first annual decline in vehicle deliveries, totaling 1.8 million units. In response, the company introduced aggressive discounts, particularly in North America and China, to stimulate demand. Musk remains focused on autonomy and robotics, but Tesla continues to trail competitors like Waymo and Chinese firms WeRide and Pony.ai in the robotaxi space. While Musk has announced plans to launch “unsupervised” Full Self-Driving (FSD) in Austin by June and hinted at licensing deals, Tesla’s brand value dropped by $15 billion in 2024, partly due to Musk’s controversial political statements. However, the company’s energy division provided a bright spot, generating $3.06 billion in revenue, a 113% increase from the previous year.
Investor concerns about Tesla, Inc. (NASDAQ:TSLA)’s future are mounting, with shareholder Ross Gerber warning of a potential 50% stock decline in 2025. He attributes this to multiple factors, including the company’s lagging FSD technology, Musk’s divided attention across multiple ventures, slowing vehicle sales, rising competition from China’s BYD, and potential reputational damage linked to Musk’s political affiliations. Gerber further argues that the company’s $1.1 trillion market capitalization is unsustainable given its lower profitability compared to rivals. His concerns are echoed by JPMorgan, which maintains a bearish outlook with a price target of $135, suggesting a potential 60% decline in Tesla, Inc. (NASDAQ:TSLA)’s stock value.
Overall, TSLA ranks 7th on our list of stocks to invest in from Israel Englander’s portfolio. While we acknowledge the potential for 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 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.
