Top Artificial Intelligence (AI) Stocks to Buy Before 46% Rise, According to Wall Street Analysts

The larger the object, the more force it requires to move it. and all market capitalization $800 billion worth of directors tesla (TSLA -1.86%) It takes a lot of strength. Over the next few years, the company will need to create significant value to maintain its stock’s upward momentum. And Morgan Stanley analyst Adam Jonas thinks this could come from investments in artificial intelligence (AI) and self-driving technology.

Jonas recently reaffirmed an “overweight” buy rating on Tesla stock and a 12-month price target of $380. This represents a 46% increase over the current price. Analysts believe Tesla’s potential to become a diversified technology company outweighs any near-term headwinds in its automotive operations. Let’s dig deeper into what could happen in the future.

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Self-driving cars have been described as the ‘mother of all AI projects’ due to the complexity of processing large amounts of unpredictable real-time data. To make the concept work, we might need the following hypothetical forms of AI: Artificial General Intelligence (AGI), which allows software to think and learn at the same level as humans. And as a leader in the race for fully autonomous driving, Tesla may be at the forefront of developing even more innovative technology.

For Jonas, Tesla’s edge centers around Dojo, a supercomputer the company is building to train machine learning and fully autonomous driving models. Dojo processes massive amounts of driving data generated by Tesla vehicles in real-world scenarios. And perhaps more importantly, we use this data to drive development. computer vision recognition — A possible precursor to AGI, with use cases in many other industries, including robotics, healthcare, and security.

As technology advances, Jonas believes Tesla could eventually generate significant revenue through software sales and licensing, representing the next step in its growth story.

The reality is probably somewhere in between.

Jonas’ prediction seems plausible, but it relies on many assumptions. The biggest thing is that Tesla will soon succeed in fully autonomous driving, but this cannot be guaranteed. The second is that other companies will not sit in the driver’s seat and provide meaningful competition to computer vision software.

But even if Tesla’s results fall below analysts’ high expectations, investors can still bet on the company’s many other growth drivers.

Image source: Getty Images.

Tesla’s core auto business is under near-term pressure, but issues such as high interest rates are expected to ease over the next few years, boosting demand for new vehicles. Moreover, management’s promise to cut the cost of Tesla’s next-generation vehicles in half is starting to bear fruit.

Tesla is developing a $25,000 Model 2 car that could be released in 2025, according to CEO Elon Musk. This follows a Reuters report that the company plans to produce the 25,000 euro ($26,863) car for the EU market at its plant. In Berlin, Germany. Cheaper cars could help Tesla achieve its long-term goal of becoming a mass-market automaker, and increased production could help it make up for falling margins.

What’s next for investors?

Entering 2024, Tesla will no longer be a screaming buy like it was in early 2023. Price-to-Earnings (P/E) Multiple With a score of 74, the company is once again a tough sell for value-oriented investors. That said, Tesla has a track record of proving naysayers wrong and justifying its premium price tag.

Jonas’ optimistic comments highlight Tesla’s potential to grow into more than just an electric vehicle manufacturer. And if even a fraction of his lofty vision is achieved, shareholders could be richly rewarded. For me, the stock is still a buy or bullish hold until more data becomes available.