10 Stocks to Watch as Top Analyst Predicts AI Surge Will Continue Despite Bubble Worries

3. Tesla Inc (NASDAQ:TSLA)

Number of Hedge Fund Investors: 115

Dan Levy, senior equity research analyst at Barclays, explained in a latest program on CNBC why he called Tesla Inc (NASDAQ:TSLA) a “meme stonk” in a latest note. Levy said Tesla’s valuation does not make sense and the stock is driven because of its massive following in retail investing circles.

“Well, there is more to the stock than the meme phenomenon. But the reality is, as we point out in the note, it is the, so to speak, OG meme stock. There is a very robust retail following driving it. In many ways, we’ve said the fundamentals just don’t matter. That’s why the stock trades at a nonsensical PE multiple, 180*26 earnings. Bitcoin is really the better comp. And then there are other technical factors driving it, including MAG 7 relative performance and option activity, which matter more than the typical fundamentals.”

Baron Focused Growth Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its second quarter 2025 investor letter:

“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles (EVs), solar products, and energy storage solutions, while also developing advanced real-world AI technologies. Despite ongoing macroeconomic challenges and regulatory complexities, shares climbed after Tesla completed a limited commercial rollout of its highly anticipated robotaxi business in Austin—following more than a decade of development and billions of dollars in investment. This milestone signals a potentially transformative shift in the automotive industry and opens up a sizable new market beyond the company’s core operations. Investor sentiment also improved after Elon Musk stepped back from government-related engagements, boosting confidence in Tesla’s near-term execution. Tesla introduced a refreshed Model Y globally, featuring design and performance upgrades, and outlined plans to unveil new mass-market models starting next quarter. Meanwhile, the company is progressing toward scaling production of its humanoid robot, adding another dimension to its long-term growth story.”