We recently compiled a list of the 10 Best Stocks to Invest in According to AI. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against the other stocks.
The rise of artificial intelligence in finance has led many investors to question whether AI-powered tools like ChatGPT can effectively pick stocks. While ChatGPT and similar large language models (LLMs) can process vast amounts of financial data, market news, and historical trends, their ability to consistently outperform human experts or quantitative models remains debatable. Instead, investors should look towards AI-driven hedge funds, such as Renaissance Technologies and Two Sigma, that have historically outperformed the market using machine learning models. For example, the Medallion Fund of the former achieved an annualized return of 66% before fees from 1988 to 2018. These funds rely on proprietary algorithms, high-frequency trading, and massive datasets.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
One indicator of hedge funds being ahead of the curve when it comes to stocks and the broader market in general is a recent Goldman Sachs note to investors which details that top hedge funds navigated the recent tech selloff without significant losses, even managing to post nominal gains since the turn of the year despite a big dropoff in the market amid concerns over trade tariffs and an AI bubble. Per a report by news agency Reuters, US President Trump has delayed tariffs on Canada and Mexico by one month, fueling wild swings in currency, bond and share markets. Despite the turmoil, stock-picking hedge funds that take bets based on company fundamentals recorded an average 2.6% return, their best month since February 2024, given a broader market rally, the report claimed.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
The stocks listed below were mentioned in articles by prominent finance publications as some of the best ChatGPT stock picks over the past six months. The return of each stock since the publication of these articles is mentioned as well. These stocks are also popular among hedge funds. 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).
Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Stock Return Over Past Six Months: 94%
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company. In earnings for the fourth quarter of 2024, the company missed market estimates on earnings per share and revenue by $0.04 and $1.44 billion respectively. The stock has taken a hit recently amid slumping sales in China and Europe. However, CEO Elon Musk, during the fourth quarter earnings call, highlighted record vehicle deliveries in Q4 2024 at an annualized rate of nearly 2 million units, with the Model Y being the best-selling vehicle globally. He also shared ambitious optimism regarding Tesla’s potential to become the most valuable company in the world, driven by advancements in autonomy and robotics.
Overall TSLA ranks 7th on our list of the best stocks to invest in according to AI. While we acknowledge the potential of TSLA as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a 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.
