Is Tesla Inc. (NASDAQ:TSLA) the Best NASDAQ Stock to Buy So Far in 2025?

We recently published a list of 13 Best NASDAQ Stocks to Buy So Far in 2025. In this article, we are going to take a look at where Tesla Inc. (NASDAQ:TSLA) stands against other NASDAQ stocks to buy in 2025.

On April 4, Wedbush analyst Dan Ives appeared on CNBC to discuss the potential impact of current tariffs and compared the situation to an economic armageddon. If the current tariffs remain in place, Ives thinks it would lead to a 15% to 20% demand reduction across the board. He thinks that investor anxiety is much higher considering how things were in the March 2020 COVID-19 crash earlier. The analyst thinks that investors should now focus on the likelihood of tariff adjustments from comments about negotiations, the impact on consumer-focused companies, and the potential for demand destruction. He even thinks that companies may refuse to provide guidance in the first-quarter earnings calls due to the persistent tariff uncertainty.

Ives thinks that a lot of tech companies will not be able to absorb high tariff increases and rather this cost will be passed on to the consumers which will lead to significant margin erosion and even potential sales declines. He indicated that tech stocks are currently pricing in a 10% to 15% cut to numbers. He suggests that investors should now look at companies with strong long-term potential as he believes earnings may normalize in 2025 and 2026. The analyst also addressed the defensive performance of defense contractors. While acknowledging the relative stability here, Ives cautioned that even these even such sectors are not immune to tariffs. He noted the significant foreign component, specifically 40% to 50% in some instances, in hardware and other sectors.

Our Methodology

We sifted through the financial media reports to compile a list of the top NASDAQ stocks to buy for 2025. We then selected the 13 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).

Tesla Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 126

Tesla Inc. (NASDAQ:TSLA) designs, manufactures, and sells EVs, along with energy generation and storage systems internationally. It operates in two segments, Automotive; and Energy Generation & Storage. The Automotive segment offers EVs, automotive regulatory credits, and vehicle insurance services. The other segment engages with solar energy generation and energy storage products.

RBC Capital Markets global autos analyst Tom Narayan recently lowered the company’s price target from $440 to $320. Narayan’s adjustment was a result of the increased competition in the FSD market. The analyst also revised his pricing forecast for Tesla Inc.’s (NASDAQ:TSLA) FSD and lowered it from $100 to $50 per month because he anticipates that autonomous driving technology could soon become standard and widely available.

However, the company’s autonomous driving and AI-related initiatives, such as the Optimus robot program, could potentially make up 90% of its total valuation. Optimus, in particular, is expected to bring over $10 trillion to the company in the long run. The company is designing all components for Optimus from scratch, to use it internally at its facilities in 2025. This means building around 10,000 units in a year. It’s also important to note that Tesla Inc. (NASDAQ:TSLA) anticipates Optimus training needs to be ten times greater than autonomous vehicles.

JDP Capital Management is positive on Tesla Inc. (NASDAQ:TSLA) due to the potential of its FSD and Optimus technologies. It stated the following regarding the company in its Q4 2024 investor letter:

“Tesla, Inc. (NASDAQ:TSLA) is new core position that I wrote about in 2024 Half Year Letter. The stock was up 115% in 2024. We benefited from the June 2024 timing of our purchase, buying after the stock had declined about 30% in the first part of the year.

We repurchased TSLA at a time when the market had [again] become overly bearish based on slowing vehicle orders despite the company having just achieved a breakthrough in Full Self Driving (FSD v12). If you haven’t had a chance to experience the most recent Full Self Driving software (FSD 13.3) I suggest you try it for yourself. If you’ve had a Tesla for a while, you know that the trajectory of FSD improvement has been nothing less than astounding.

It has become clearer to me that Tesla’s leadership position in the infrastructure layer underpinning mega-trends in robotics, smart vehicles and battery storage will unlock earnings growth that we can ride for years. Similar to AWS or the iPhone, Full-Self-Driving and Optimus will enable new business models to be built across a wide range of industries over time…” (Click here to read the full text)

Overall, TSLA ranks 9th on our list of the best NASDAQ stocks to buy so far in 2025. 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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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.