We recently published a list of 10 Hottest Mega-Cap Stocks of 2025. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other hottest mega-cap stocks of 2025.
In 2024, companies poured money into Artificial Intelligence infrastructure in a bid to outpace each other in the AI race. The communication services and information technology sectors led the the large-cap stocks in terms of returns. AI-driven hype was so significant that for the first time since 1998, the S&P’s large-cap index registered two consecutive years of 20%+ gains.
2025 may well be the year of reckoning for AI. Some analysts have questioned the massive AI spending throughout the last year. Their concerns and predictions were dealt a reality check though when Bill Gates’ tech giant announced it planned to spend $80 billion on AI in fiscal 2025. Consequently, semiconductor stocks rallied, reminding everyone that the AI rally wasn’t over by any means.
Not surprisingly, the list is dominated by chipmakers, who we believe will be critical to the market’s returns this year. To come up with the 10 hottest mega-cap stocks of 2025, we considered stocks with at least $75 billion market capitalization.
Tesla, Inc. (NASDAQ:TSLA)
2025 is the year Tesla, Inc. (NASDAQ:TSLA) plans to use the first humanoid robot internally. By next year, the company plans to start rolling out these robots to other companies. Robotaxis could also arrive soon. As Tesla’s (NASDAQ:TSLA) annual sales decline for the first time in 13 years, this is the perfect time for the company to launch a product for a new income stream. How successful it is in pursuing these ventures will determine the stock’s trajectory in the next 12 months.
Investors will also be keeping a close eye on Elon Musk’s influence on the regulation of autonomous vehicles. The market is expecting positive developments for Tesla (NASDAQ:TSLA) once Donald Trump takes oath later this month. However, the stock has run up over 40% since the election, so a lack of immediate positive development may also weigh heavily on the stock.
Bank of America recently maintained its BUY rating on the stock, confirming the importance of the above-mentioned developments. BofA analyst John Murphy released this statement after a recent visit to the Austin, Texas gigafactory.
The trip gave us increased confidence that TSLA is well positioned to grow in 2025+ with its core EV business and launch of its robotaxi offering, and longer-term from its investments in Optimus.
With so much to look forward to this year, we believe Tesla will be one of the hottest, if not the hottest, stocks of the year.
Overall, TSLA ranks 7th on our list of hottest mega-cap stocks of 2025. While we acknowledge the potential of TSLA as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as TSLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.