As Nvidia’s valuation skyrocketed from $360 billion to $3.46 trillion between early 2023 and June 2024, it became a poster child for AI-related growth. However, as Nvidia faces increasing competition and potential declines in pricing power, investors are looking to other promising AI stocks: Tesla and Mobileye Global.
Tesla: A Vision for Autonomous Growth
Tesla, led by CEO Elon Musk, is positioning itself as a leader in electric vehicles (EVs) and autonomous driving technology. Cathie Wood of Ark Invest has set an ambitious price target of $2,600 per share by 2029, implying an upside of 1,050%. The core of this bullish outlook lies in Tesla’s potential to dominate the autonomous ride-hailing market through its robotaxi initiative. Wood estimates that by 2029, Tesla could generate $1.2 trillion in sales, with a significant portion stemming from robotaxi operations.
Despite Tesla’s achievements in EV manufacturing, there are concerns about its ability to fulfill these lofty projections. The company currently lacks any fully autonomous robotaxis on the road and has struggled to advance its self-driving technology beyond Level 2 autonomy. Furthermore, increased competition in the EV space has pressured Tesla’s operating margins, and the company faces challenges from rivals launching their own vehicles with advanced autonomous features.
Mobileye Global: A Leader in Driver Assistance
Mobileye Global, known for its advanced driver assistance systems (ADAS) and autonomous driving technologies, is another stock to watch. With analysts projecting that Mobileye’s stock could jump to $35 per share—an increase of 216%—the company is well-positioned in the evolving EV landscape. Mobileye’s EyeQ chips power its SuperVision ADAS, which enhances vehicle safety through multiple cameras and autonomous vehicle mapping.
However, Mobileye is not without its challenges. The EV industry faces growing pains, including infrastructure limitations that have affected global sales. Additionally, delays from key customers and new tariffs in Europe and the U.S. have prompted Mobileye to temper its sales forecasts, with projected revenue now lower than previous expectations.
Conclusion
While Nvidia has been the standout performer in the AI sector, Tesla and Mobileye Global offer compelling growth narratives. Tesla’s potential in autonomous ride-hailing and Mobileye’s advancements in ADAS technology highlight the ongoing evolution of the AI landscape. However, investors should remain mindful of the competitive pressures and market dynamics that could shape their trajectories in the coming years.