We recently published a list of 10 Best Stocks to Buy for High Returns in 2025. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other best stocks to buy for high returns in 2025.
Market Outlook 2025
On December 17, 2024, J.P. Morgan released its market outlook 2025. The report expects the global economy to continue growing at a robust rate, however a sharp slowdown in China is expected. Regarding the equity market, the firm anticipates depressing trends across stocks, sectors, and themes. Analysts at the firm estimate the S&P 500 to be around 6,500 in 2025 with earnings per share of $270. The head of Global Market Research, Hussain Malik noted that the policies of the United States regarding trade, immigration, and regulatory policy will play a critical role in defining the year’s outcome for the country and globally.
The report further elaborated on its anticipation of a depressed stock market by highlighting de-coupling central bank policies, uneven progress in disinflation, and ongoing technological innovation. Moreover, increased geopolitical tensions are also likely to add unusual complexity to the global stock market. Despite all this, the firm has bright expectations for the United States. It believes that the country will remain a key driver of growth due to factors such as an expanding business cycle, a robust labor market, increased capital spending related to AI, and active capital markets. On the other hand, Europe is expected to grapple with structural challenges, while emerging markets may face headwinds from persistent high interest rates, a strong US dollar, and trade policy issues.
Lakos-Bujas, head of Global Markets Strategy at J.P. Morgan warned that a key risk to their base case involves disinflation stalling or reversing, which could prompt the Federal Reserve to consider interest rate hikes later in 2025 or early 2026. Such developments would necessitate a reassessment of their market outlook.
Our Methodology
To curate the list of the 10 best stocks to buy for high returns in 2025, we used Insider Monkey’s third-quarter hedge funds database. We checked the 25 most widely held stocks by hedge funds for 10-year growth rates from Seeking Alpha and ranked these stocks in ascending order of the number of hedge funds.
Why do we care about what hedge funds do? 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)
10-Year Revenue Growth: 42.28%
Number of Hedge Fund Holders: 99
Tesla, Inc. (NASDAQ:TSLA) is one of the best stocks to buy for high returns in 2025. The company holds the title of being one of the pioneers in the electric vehicle industry. It is known for its popular electric vehicles including the Cyber Truck, Model 3, Model S, Model Y, and Model X. In addition to electric vehicles, the company is also pushing boundaries with its autonomous driving technology and humanoid robots.
On January 22, Alexander Potter analyst at Piper Sandler raised his price target for Tesla, Inc. (NASDAQ:TSLA) from $315 to $500, calling it the best stock to Buy and Hold. His sentiment is based on the expectation that the company will deliver around 1.96 million vehicles in 2025, which is a 1.79 million increase from 2024. However, Potter expects the first half of 2025 to be a bit choppy for the company as the timing of new product launches has not been announced yet.
Potter’s analysis regarding Tesla, Inc. (NASDAQ:TSLA) is in line with management’s plan for the year. During the earnings call for the fiscal third quarter of 2024, CEO Elon Musk highlighted that the company is strategically focusing on expanding its vehicle production and also enhancing accessibility by introducing more affordable models during the first half of 2025. The company plans to launch affordable models priced between $30,000 and $35,000 before tax credits. Moreover, the company is also set to begin volume production of the Cybercab in 2026, targeting an annual output of at least 2 million units, with potential scalability of up to 4 million units in the future. This expansion aligns with Tesla’s vision of becoming a leader in sustainable and autonomous transportation. Here’s what Infuse Asset Management stated regarding Tesla, Inc. (NASDAQ:TSLA) in its Q4 2024 investor letter:
“I’ve been very patient with Tesla, Inc. (NASDAQ:TSLA). Frankly, I’m a big believer in Elon but I also hate investing in companies where the narrative far outweighs any financial evidence. I do see a path to Tesla being one of the world’s largest companies but slight growth in a cyclical industry with very little pricing power is not a recipe for strong forward returns. Though the AI/robotics narrative is strong, I’m not adding at current prices since we haven’t seen much of the narrative translate into the earnings yet. This cognitive dissonance can be an uncomfortable tension but I’m trying to look at the big picture here. So while I fully admit that Tesla may be overvalued in the short run, the long-term destination of the company should not be underestimated.”
Overall, TSLA ranks 10th on our list of best stocks to buy for high returns in 2025. While we acknowledge the potential of TSLA to grow, our conviction lies in the belief that 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.