Tesla, Inc. (TSLA) Bets on Full Self-Driving and Optimus Robots as AI Future Accelerates

We recently published a list of 10 AI Stocks That Will Skyrocket. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other AI stocks that will skyrocket.

AI (Artificial Intelligence) isn’t just a buzzword anymore—it’s becoming a part of our everyday lives, from the apps we use to how businesses operate. For investors, that means opportunity. As AI continues to grow, some companies are leading the charge and showing real potential for long-term gains. Whether you’re looking to diversify your portfolio or tap into the future of tech, this article will walk you through some of the best AI stocks worth watching right now. AI stocks saw incredible gains over the last couple of years, particularly in 2024, as AI applications burgeoned. The current weakness in AI stocks, caused by geopolitical tensions, may be a good opportunity to load up on AI stocks.

AI is Likely to Have a Myriad of Applications

In an interview with CNBC, the CEO and CIO of Ark Invest, Cathie Wood, underscored her bullishness on the AI sector despite the recent weakness in those stocks. According to Wood, AI has a massive runway. She compared the current AI position to the internet in the early to mid-90s. Wood is optimistic about robotaxis in the near term and the application of humanoid robots in the long term. However, the most under-appreciated application of AI, according to Wood, is healthcare, as AI will accelerate the curing of diseases. Within the medical application of AI, Cathie Wood is particularly bullish on sequencing technology, which is used to read DNA. AI is a great application in sequencing as it helps analyze, interpret, and act on that genetic data much quicker and more accurately than traditional methods.

A segment within AI that is hot right now is Generative AI. Generative AI creates customized answers for the user based on real underlying data. Gen AI has created a massive investment cycle of over $200 billion annually, led by the ‘magnificent 7’. The tech behemoths are competing intensely over leadership in Gen AI. Meanwhile, an upcoming AI theme centers on how large language models (LLMs). According to Morgan Stanley, leading companies behind the most advanced LLMs are prioritizing high-performance chips and top-tier software to deliver AI solutions that are becoming essential for both businesses and consumers. While initial LLM use cases primarily included content creation, summarization, and categorization, industry leaders believe that the greatest yet-to-be-realized opportunity lies in applying AI reasoning to enterprise data.

Our Methodology

To compile the list of AI stocks that will skyrocket, we reviewed AI ETFs to compile a preliminary list of stocks and then selected the ones with the highest upside potential based on Wall Street analysts’ average price targets. We have also mentioned the hedge fund sentiment around each stock, as of Q4 2024.

Note: All data was recorded on April 21, 2025.

At Insider Monkey, we are obsessed with 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)

Upside Potential: 51.66%

Number of Hedge Fund Holders: 126

Tesla, Inc. (NASDAQ:TSLA) is not merely an electric-vehicle company. It is pretty much an AI company, given its ambitions.  Its foremost foray into AI is its autonomous driving technology, the Full Self-Driving (FSD), which uses massive amounts of real-world driving data, computer vision, and Dojo supercomputer, the company’s in-house AI training supercomputer, which processes video data from millions of vehicles. Tesla, Inc. (NASDAQ:TSLA) is also working on Optimus, which is a humanoid robot built to perform repetitive and dangerous tasks. The EV-maker also uses AI to optimize production line, quality-control, and to predict equipment maintenance needs.

Tesla, Inc. (NASDAQ:TSLA) reported poor Q1 2025 results on April 22. The EV giant’s revenue fell 20% year-over year. Its EPS sank 40% to 27 cents per share while revenue fell 9% to $19.34 billion. Meanwhile, auto gross margins excluding regulatory tax credits came in around 12.5%, marking the lowest auto gross margins since Q2 2012. However, the Tesla’s stock still rose 5.17% on April 23.

On April 24, Stifel analysts revised the price target for Tesla to $450 from the previous $455, while keeping a Buy rating on the stock. The firm cited increased sales from the new Model Y, the introduction of lower-priced vehicles to the market, and the anticipated deployment of Tesla’s unsupervised Full Self-Driving feature in Austin, Texas, in June as catalysts for the stock. Its scalable AI system allows robotaxis to operate in various cities, unlike location-specific rivals. Meanwhile, the company said in its Q1 2025 earnings call that the Optimus humanoid robot is advancing quickly, with thousands expected in Tesla factories by late 2025 and a goal of one million units annually by 2030.

Overall, TSLA ranks 7th on our list of AI stocks that will skyrocket. While we acknowledge the growth potential of TSLA as an investment, 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.