Is Tesla Inc. (NASDAQ:TSLA) the Best QQQ Stock to Invest in Now?
March 15, 2025
We recently published a list of 12 Best QQQ Stocks to Invest in Now. In this article, we are going to take a look at where Tesla Inc. (NASDAQ:TSLA) stands against other best QQQ stocks to invest in now.
Lunch’ to analyze the market’s reaction to the tariff announcements. McCartney referred to the situation as tariff policy ping pong, and highlighted how it adds to the uncertainty in Washington during a time when weak data is emerging from other areas. She explained that this has created a perfect storm of challenges, which includes seasonal pressures that make this time of year difficult. Retail buyers have stepped away from the market, and there is uncertainty for individuals regarding tax policy and for corporations concerning tariffs and taxes. The withdrawal of overleveraged bids has contributed to increased market volatility, which makes it harder for major tech companies to maintain their leadership roles.
The conversation then turned to the influence of key sectors, particularly the MAG7. McCartney noted that when these sectors underperform, they can generate downside pressure on the market, which contrasts with the desire for a broader market trade. She pointed out that while these tech stocks are down year-to-date, the overall market remains materially up and is annualizing at a high single-digit rate. She expressed optimism about market breadth and suggested that this could present a buying opportunity for investors to re-enter big tech.
Tech stocks face short-term volatility due to market uncertainty, but their long-term potential remains intact.
We sifted through the Invesco QQQ exchange-traded fund (ETF) holdings to find 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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).
Number of Hedge Fund Holders: 126
Tesla Inc. (NASDAQ:TSLA) is a leader in EVs and sustainable energy. It operates through Automotive and Energy Generation and Storage segments. It designs, manufactures, and sells EVs, solar energy systems, and energy storage solutions. It also provides services like supercharging, financing, and insurance.
The company is focused on AI in autonomous driving and robotics. On March 10, Morgan Stanley kept an Overweight rating on the stock with a $430 price target. The analyst sees the stock’s pullback from December highs as a buying opportunity, despite factors like poor sales data and negative sentiment. The company’s stock may rise due to the Austin robotaxi launch (which is unsupervised FSD/Full Self-Driving as a paid service prepared for June-August), new autonomous vehicle rules, and an Optimus AI/Humanoid demonstration.
The company’s autonomous driving and AI-related initiatives, which include its Optimus robot program, could eventually contribute 90% of the company’s valuation. The company believes Optimus can generate over $10 trillion in revenue. Tesla Inc. (NASDAQ:TSLA) is designing all components of Optimus from scratch. Internal plans call for building ~10,000 Optimus robots in 2025, with significant production ramp-up expected in subsequent years. Optimus training needs are expected to be at least 10x greater than those for autonomous vehicles.
Tesla Inc. (NASDAQ:TSLA) profitability comes from its energy segment growth, upcoming model launches, AI advancements, and improved delivery data. This reinforces investor confidence in its future. Baron Partners Fund stated the following regarding the company 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 9th on our list of best QQQ stocks to invest in now. While we acknowledge the growth potential of TSLA, our conviction lies in the belief that AI stocks hold great promise for delivering high 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.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires
Disclosure: None. This article is originally published at Insider Monkey.
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