Is Tesla (TSLA) the Best Technology Stock to Buy for Long-Term Investment?

We recently published a list of the 13 Best Technology Stocks to Buy for Long-Term Investment. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other tech stocks to buy for long-term investment.

On May 12, Jeff Kilburg of KKM Financial and Dan Ives of Wedbush Securities appeared together on CNBC to discuss AI, cybersecurity, and mega-cap tech, especially as tech stocks soar as the US-China tariff deal boosts market confidence. Jeff Kilburg first identified the tech software sector as the primary beneficiary of the recent market pause amid optimism and gains, and highlighted that markets are broadly positive. He noted that many investors underestimated how quickly a China trade deal would materialize and contrasted it with the UK deal, which was expected to be a slower, tentative template. Kilburg suggests that faster deal-making could continue and benefit several software companies, which have been overlooked due to the focus on the MAG7. Dan Ives concurred with Kilburg’s view but singled out NVIDIA as the biggest near-to-medium-term beneficiary of the pause, especially given its prior exposure to China tariffs. He referenced the ongoing AI revolution and the surge in AI-related stocks and described the current environment as a dream scenario for tech investors. Ives anticipates new highs for tech and the broader market. He also described a ‘golden age’ for cybersecurity stocks, which are acting as secondary beneficiaries of AI growth.

On a question about the impact of the admin’s focus on reducing federal spending and debt, particularly on companies that derive substantial revenue from government contracts, Kilburg responded that this fiscal discipline is actually positive for software companies as it may drive more spending toward efficient software solutions. Kilburg also addressed the sectors to avoid or be cautious about amid the current market environment. He suggests trimming utilities, which have been a safe haven but may now be less attractive. He points out that the VIX volatility index dropping below 20, which is a big change from over 60 in April, indicates reduced market fear and increased investor confidence. This suggests a market environment favoring higher-beta and growth-oriented investments rather than defensive plays.

Our Methodology

We first sifted through stock screeners, ETFs, and financial media reports to compile a list of the top tech stocks that have grown over 15% in the past 3 years. 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.

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)

3-Year Revenue CAGR: 15.46%

Number of Hedge Fund Holders: 126

Tesla Inc. (NASDAQ:TSLA) designs, develops, manufactures, leases, and sells electric vehicles, and energy generation & storage systems. Its Automotive segment offers EVs and related services and products. Whereas the Energy Generation & Storage segment engages in the design, manufacture, installation, sale, and leasing of solar energy generation & energy storage products and related services.

According to EV’s Claudio Afonso, sales of the new Tesla vehicles in China dropped 58% from the previous week and 69% year-over-year in the second week of May, which is the lowest level since January. Still, on May 13, analyst Colin Langan from Wells Fargo maintained a Sell rating on the stock with a $120 price target. Tesla Inc. (NASDAQ:TSLA) is also facing challenges in Europe, with declines in vehicle registrations in key markets like the UK and Germany.

The company is attempting to boost US sales by introducing a cheaper Model Y. Musk recently stated that the company is focused on bringing robotaxis to Austin in June, with unsupervised autonomy initially being solved for the Model Y in Austin. He anticipates expanding this capability to many other US cities by the end of 2025. While the exact ramp-up speed cannot be predicted, Musk is confident that millions of Tesla vehicles will be operating fully autonomously in H2 2026.

JDP Capital Management initiated a new core position in the company and stated the following regarding Tesla, Inc. (NASDAQ:TSLA) 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 4th on our list of the best technology stocks to buy for long-term investment. 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 this 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.