We recently published a list of Top 10 Buzzing AI Stocks to Watch Now. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other top buzzing AI stocks to watch now.
Doug Clinton, Deepwater Asset Management co-founder, said in a latest program on CNBC that the AI trade is still intact but the market is going through a period of “doubt” and many major AI stocks have lost their momentum.
“The vibe has shifted, and I think investors, more broadly, almost want to believe the AI trade is over. They’re looking for evidence, reasons to doubt. That’s the hard part for this trade right now—momentum has lost its momentum. From our perspective, the AI trade is still real. I don’t think this boom is over; I still see two to four years ahead. But in every technology-driven boom, we go through periods of doubt. That’s a healthy part of the cycle, and we just need to work through it.”
When asked about high valuations, the analyst said many of the AI stocks have “reasonable” valuations and upside.
“If you look at the hyperscalers, I think their valuations are still largely reasonable, even though they make up a big share of the market, which concerns some investors. We’re talking about mid-20s PEs for them. Some of the more growth-driven momentum names still have upside. Their multiples look expensive now, but as they continue to grow—and that’s the key question—those multiples will actually appear higher now than they will in the future.”
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For this article, we picked 10 AI stocks the market is talking about these days. With each stock, we have mentioned the number of hedge fund investors. 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).
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Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Investors: 126
George Gianarikas, Canaccord Genuity analyst, said in a latest program on CNBC that trends for Tesla, Inc. (NASDAQ:TSLA) in China have not been great. However, he’s still keeping his buy rating on the stock as he waits for more clarity on the performance and impact of the company’s new models.
“The trends in the US and Europe last year weren’t great; they were saved by a remarkably strong year in China. So far this year, just the little data points that we have suggest that the trends aren’t great in 2025, but the stock is really hinging upon the new vehicles they’re introducing, first the new Model Y, which looks like a remarkably nice vehicle, and the promise of additional vehicles throughout the rest of the year. Obviously, they’re going to start ramping Optimus production, so we’ll have to wait and see. We kept our buy rating because usually, in technology or in vehicles, when you have new products coming out and the company’s done a really good job of introducing new products that people like, those tend to really move the P&L and reinvigorate growth. So that’s what we’re hoping for, and we’ll see. We’ll find out how compelling the new vehicles are. So far, so good with the new Model Y.”
Analysts are still trying to look beyond Elon Musk’s claims and find out the specifics of the company’s EV and robo-taxi plans.
Tesla, Inc.’s (NASDAQ:TSLA) product lineup is showing signs of stagnation, with over 95% of sales still coming from the Model 3 and Model Y. Meanwhile, competitors are rolling out more advanced models. According to Reuters, Tesla’s market share in Europe is slipping as legacy automakers like BMW post stronger sales. Chinese competitor BYD is also gaining ground in Europe, despite talk of tariffs.
Baron Partners Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) 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 6th on our list of top buzzing AI stocks to watch now. While we acknowledge the potential of TSLA as an investment, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. 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.
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