What Makes Tesla (TSLA) a Lucrative Investment?

Tsai Capital Corporation, an investment management firm, released its fourth quarter 2025 investor letter. A copy of the letter can be downloaded here. Tsai Capital Growth Equity Strategy gained 8.5% before fees and 7.6% after fees for the year ended December 31, 2025, compared to the S&P 500 Index’s 17.9% return. Tsai Capital Growth Equity Strategy has gained 970% cumulatively before fees and 658% after fees, since its inception 26 years ago, compared to the S&P 500 Index’s total return of 639%. The strategy’s objective is to invest long-term in exceptional companies that can quickly and effectively allocate capital towards the most promising ideas and talent. Currently, the portfolio is invested in 17 high-quality growth companies across sectors. In addition, you can check the top five holdings of the Strategy to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Tsai Capital Corporation highlighted stocks like 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 -4.06%, and its shares gained 7.79% of their value over the last 52 weeks. On January 28, 2026, Tesla, Inc. (NASDAQ:TSLA) stock closed at $431.46 per share, with a market capitalization of $1.435 trillion.

Tsai Capital Corporation stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its fourth quarter 2025 investor letter:

Tesla (TSLA—Year of First Purchase: 2020): Tesla is a leading artificial intelligence (AI) company that has formidable competitive advantages across various sectors, including electric vehicles, software, and energy storage. Our investment in Tesla traces its origins to February 2020, when we acquired shares at an average initial cost of $41.66 per share.

Tesla stands as a profound anomaly in the corporate landscape, charting an utterly unconventional course that frequently engenders bewilderment in the markets and draws sharp rebukes from short sellers and skeptics alike.

Guided by Elon Musk, a controversial yet highly skilled capital allocator, Tesla has embraced a scale-economies-shared business model, strategically reducing prices to amplify the allure of its offerings, accelerate widespread adoption, and broaden the horizons of its total addressable market….” (Click here to read the full text)

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 NewBridge Large Cap Growth Equity Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q4 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.