We recently published a list of Top 10 AI Stocks Trending On Wall Street. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other top AI stocks trending on Wall Street.
The tech world may be steering in a new direction with the emergence of DeepSeek and the cheaper and more efficient models it promises. In the latest news, bulls from Europe have deemed that the sector may have further to run, despite the emergence of these Chinese copies. This news emerged after January 27, when the tech world witnessed a broad market sell-off driven by DeepSeek’s advancements, investors’ concerns regarding West’s huge investments in chipmakers and data centers, valuation risks, and increasing competition from alternative AI models. In short, DeepSeek sparked a rout in the tech world.
READ ALSO: 10 AI Stocks Making Waves on Wall Street and 10 AI Stocks on Analysts’ Radar Right Now
With the emergence of these models, companies are readjusting their approaches, focusing more on efficiency rather than demand. Even big AI names such as OpenAI have been prompted to rethink their strategies. The AI startup is reportedly thinking of “figuring out a different open-source strategy” after DeepSeek released a lower-cost open-source AI model, Seeking Alpha reported Saturday. Moreover, OpenAI Chief Product Officer Kevin Weil recently unveiled that the company was considering open-sourcing older AI models. This reflects a broader industry shift toward efficiency and accessibility.
Nevertheless, since the sell-off, tech stocks have thankfully rebounded. European markets in particular are hitting new highs, Reuters reports. One economic theory, known as the “Jevons Paradox” seems to be the answer. According to the paradox, when a resource becomes more efficient to use, demand may increase rather than the other way around. This is because the price of using the resource drops.
“I hadn’t discussed it until Monday (last week), and then suddenly it’s everywhere. This paradox highlights one of the uncertainties at the moment,” said Jewell, flagging that a key question for European stock-pickers is whether data centres and their suppliers will be less in demand.”
-Helen Jewell, Chief Investment Officer at BlackRock Fundamental Equities, EMEA, as reported on Reuters.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. 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).
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Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives. On February 4th, Piper Sandler reiterated Tesla as “Overweight” with a $500 target. According to the firm, the stock is relatively insulated from tariffs. President Donald Trump recently put 25% tariffs on goods from Mexico and Canada and 10% tariffs on China. Even though he has agreed to pause the tariffs on Mexico and Canada for a month, the one on China is still active. Tesla (NASDAQ:TSLA) produces a significant portion of its automobiles in China. Even though these tariffs will hit all automakers, Tesla will sidestep some challenges considering that it operates factories in the U.S., Berlin, and Shanghai, CNBC reports. Currently, Tesla boasts the highest percentage of domestically assembled cars with most of its models on Cars.com’s list of most American-made vehicles. The Piper Sandler analyst also trimmed his full-year vehicle deliveries forecast on the automotive company to just under two million. This is about 58,000 units lower than its previous outlook.
“In the meantime, we think TSLA is one of the most defensive stocks in our coverage. Tesla assembles five vehicles in the U.S., and all five rank among the most American-made cars. Nobody is completely insulated, but in relative terms, Tesla is better-positioned than most.”
-Piper Sandler
Post-election, Tesla (NASDAQ:TSLA) has been worth more, Wall Street says. However, the main way it sees Tesla benefitting under Trump 2.0 is with federal standards easing the introduction of self-driving cars. Investors, in particular, are on the watch for self-driving cars.
“Musk has discussed FSD/autonomy as the true value of Tesla. This has been met with a higher level of skepticism from investors, but may have even greater upside than the core automotive business if successful”.
-Baird analyst Ben Kallo wrote on Tuesday.
Overall, TSLA ranks 4th on our list of top AI stocks trending on Wall Street. While we acknowledge the 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 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.
