Contrarius Global Equity Fund Believes Tesla (TSLA) Remains an Extremely Undervalued Stock

Contrarius Investment Management, an investment management company, released its third-quarter investor letter for the “Contrarius Global Equity Fund”. A copy of the letter can be downloaded here. The fund’s investor class returned 30.9% in the September quarter compared to 7.3% for the benchmark MSCI World Index, including reinvested net income, and 5.5% for the Average Global Equity Fund. The fund’s investment philosophy is independent of benchmark considerations, so the portfolios typically deviate from the benchmark World Index.  Additionally, please review the fund’s top five holdings to see its leading picks in 2025.

In its third-quarter 2025 investor letter, Contrarius Global Equity Fund highlighted stocks such as Tesla, Inc. (NASDAQ:TSLA). Tesla, Inc. (NASDAQ:TSLA) designs, develops, manufactures, leases, and sells electric vehicles, as well as energy generation and storage systems. The one-month return of Tesla, Inc. (NASDAQ:TSLA) was 7.08%, and its shares gained 13.82% of their value over the last 52 weeks. On December 29, 2025, Tesla, Inc. (NASDAQ:TSLA) stock closed at $459.64 per share, with a market capitalization of $1.529 trillion.

Contrarius Global Equity Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its third quarter 2025 investor letter:

“Importantly, while there has been some rotation within the Fund, certain of the Fund’s holdings that have rerated are still regarded as extremely attractive. Our top three positions at 30 September—Tesla, Inc. (NASDAQ:TSLA), Warner Bros. Discovery and Paramount Skydance (Paramount)—have been amongst our largest holdings for some time. All three have been large contributors to performance over the past year. In terms of Tesla, given Fund limits and internal risk limits for our Global Equity Strategy, the Fund has reduced its Tesla holding at various points when it has exceeded 10% of Fund through market value movements. Despite Tesla’s outperformance we believe that the market is only beginning to recognise the enormous opportunity that Tesla has in real-world AI (autonomous driving and humanoid robots). We discussed this extensively in our Q2 2024 Quarterly Commentary. We continue to believe Tesla remains extremely undervalued. It is very likely that Tesla will remain one of the Fund’s largest holdings for some time—barring a truly dramatic increase in price.”

Tesla, Inc (TSLA)'s "No Longer A Car Company,' Says Jim Cramer

Tesla, Inc. (NASDAQ:TSLA) is in the 23rd position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 120 hedge fund portfolios held Tesla, Inc. (NASDAQ:TSLA) at the end of the third quarter, up from 115 in the previous quarter. While we acknowledge the risk and potential of Tesla, Inc. (NASDAQ: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 Tesla, Inc. (NASDAQ:TSLA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Tesla, Inc. (NASDAQ:TSLA) and shared the list of stocks Jim Cramer discussed. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.