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Tesla (TSLA) Shares Fell 29.3% in Q1

Baron Funds, an investment management company, released its “Baron Partners Fund” first quarter 2024 investor letter. A copy of the letter can be downloaded here. The first quarter of 2024 was disappointing for the fund. It declined 9.01% (institutional Shares) in the quarter trailing its primary benchmark, the Russell Midcap Growth Index (the Index), and the large-cap S&P 500 Index, which returned 9.50% and 10.56%, respectively. Over the last three years, the Fund has not advanced much. However, the Fund continues to have outstanding absolute and relative performance over the long run. Its annualized returns over the past 5, 10, and 15 years are 25.16%, 17.37%, and 20.45%, respectively, compared to the index’s annualized returns of 11.82%, 11.35%, and 15.64%, respectively. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Baron Partners Fund highlighted stocks like Tesla, Inc. (NASDAQ:TSLA), in the first quarter 2024 investor letter. Tesla, Inc. (NASDAQ:TSLA) designs, develops, manufactures, leases, and sells electric vehicles, and energy generation and storage systems. Tesla, Inc.’s (NASDAQ:TSLA) one-month return was -3.62%, and its shares lost 18.17% of their value over the last 52 weeks. On May 31, 2024, Tesla, Inc. (NASDAQ:TSLA) stock closed at $178.10 per share with a market capitalization of $567.997 billion.

Baron Partners Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its first quarter 2024 investor letter:

“The vast majority of the Fund’s underperformance this quarter stemmed from the Fund’s 10-year investment in Tesla, Inc. (NASDAQ:TSLA). Tesla’s shares fell 29.3% during the period and detracted 13.41% from the Fund’s first quarter results. Although Tesla has contributed importantly to the Fund’s performance since 2014, on occasion it has detracted from quarterly performance. In previous instances when Tesla shares have underperformed during a discrete period, they have shortly afterwards reflected the strong growth of the underlying business and the stock has appreciated considerably. We believe that will be the case again, although cannot guarantee it.

A significant decline also occurred at the end of 2022. In that instance, investors had become concerned about a host of external factors. Investors believed the company founder, visionary, and CEO Elon Musk was distracted by his acquisition of Twitter. They also believed a weak Chinese economy emerging from COVID and U.S. government policies would curtail the purchases of Tesla vehicles. These fears proved to be overblown. As the company achieved milestones in the succeeding year, the stock subsequently doubled over the next 12 months…” (Click here to read the full text)

25 Most In Demand Cars Heading into 2024

Tesla, Inc. (NASDAQ:TSLA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 74 hedge fund portfolios held Tesla, Inc. (NASDAQ:TSLA) at the end of the first quarter which was 82 in the previous quarter.

In the first quarter, Tesla, Inc.’s (NASDAQ:TSLA) revenue fell by -8.70% compared to the same period last year and the company reported a negative free cash flow of $2.5 billion in the quarter. (See the details here)

In another article, we discussed Tesla, Inc. (NASDAQ:TSLA) and shared Aristotle Atlantic Partners’ views on the company. Baron Fifth Avenue Growth Fund also commented about Tesla, Inc. (NASDAQ:TSLA) in its first quarter 2024. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

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

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

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Wall Street calls this $3 stock a “Melting Ice Cube.” They said the same thing about BTI before it returned 90%.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

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We looked under the cover and realized they were wrong.

We alerted our subscribers, and BTI returned 90% in just 16 months.

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Today, we have identified a nearly identical pattern in a digital-first giant trading at $3.

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