We recently published a list of Jim Cramer says you should buy these 10 stocks. Since Tesla Inc (NASDAQ:TSLA) ranks 4th on the list, it deserves a deeper look.
Jim Cramer last week talked about the decline in tech stocks after the latest CPI report, saying investors “abandoned” tech stocks like “rats from a sinking ship.”
“It was titanic! They took their money and went into the small and medium-sized companies that we call the Russell 2000 because we got a much softer than expected consumer price index.
Cramer said the latest CPI number shows inflation has “taken a beating” and interest rates are “falling.” The CNBC host said if we continue to get positive data, he wouldn’t be surprised to see not one, but two or three rate cuts this year.
Cramer wondered how big tech companies could fall at low inflation numbers and answered his own question by saying that sometimes against a backdrop of lower bond yields, stocks of companies that “need rates lower” may suddenly increase.
“What happened today always happens when rates fall,” Cramer said.
However, Cramer said there is not yet enough positive data available to continue to support this rally in stocks benefiting from lower rates, adding that such short-term gains last for about three days. Cramer predicted that major tech stocks will bounce back after “a few more down days.”
For this article we took a look at some of Jim Cramer’s latest programs and picked 10 stocks he’s passionate about. With each company we have mentioned the number of hedge fund investors. Why are we interested in the stocks in which hedge funds accumulate? The reason is simple: our research has shown that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter strategy picks 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Tesla Inc (NASDAQ:TSLA)
Number of hedge fund investors: 74
Cramer thinks Tesla Inc (NASDAQ:TSLA) has the potential to join the $1 trillion “club.” He said the company just needs to demonstrate that Tesla Energy can be a bigger part of its business. Cramer said Tesla Inc’s ( NASDAQ:TSLA ) vehicle sales are “leveling off” after a period of decline, while its self-driving projects like robo-taxis could be “the biggest thing happening.” Cramer said China could be a big market for robo-taxis.
“This thing got a lot of momentum.”
Tesla shares recently fell after the company postponed its highly anticipated robo-taxi event until October. However, Tesla bulls say their core thesis remains unchanged.
Cathie Wood recently set a $2,600 price target on Tesla Inc (NASDAQ: TSLA ) for 2029, which represents an incredible 1,300% upside potential from current levels. Wood thinks the robo-taxi project has the potential to bring in $8 to $10 trillion in revenue by 2030.
However, many believe that Tesla Inc ( NASDAQ:TSLA ) will not be able to live up to the hype surrounding its robo-taxi plans. Each robo-taxi is expected to have a price target of around $150,000 to $200,000, with some estimates suggesting that Tesla Inc (NASDAQ: TSLA ) would need around $35 billion to develop a global foothold of the cars Like that. Between inflation and a lack of preference for electric cars, American households will probably stay away from spending a fortune on self-driving taxis, which could deal a blow to Tesla Inc’s ( NASDAQ:TSLA ) future plans.
Alger Focus Equity Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q1 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) is an electric vehicle maker with a technological advantage in its large and rapidly growing addressable market. In our opinion, Tesla is a transportation company that is setting the pace for innovation in the industry. During the quarter, the stock underperformed after the company reported fiscal fourth-quarter results where revenue and profit missed analysts’ estimates. Weaker-than-expected automotive revenue was partially impacted by a decline in average selling price, which was down 15% year-over-year. Additionally, management decided to refrain from providing volume guidance, although they acknowledged that they are in a lower growth phase given the uncertain consumer environment, especially as it relates to high-ticket purchases.
Overall, Tesla Inc (NASDAQ:TSLA) is ranked #4 on Insider Monkey’s titled list Jim Cramer says you should buy these 10 stocks. While we acknowledge the potential of Tesla Inc (NASDAQ: TSLA ), our conviction lies in the belief that AI stocks hold greater promise to deliver higher returns, and doing so within a shorter time frame. . If you’re looking for an AI stock that’s more promising than TSLA but trades at less than 5 times its earnings, check out our report on Cheapest AI stock.
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Disclosure: None. This article was originally published on Insider Monkey.