A Once-in-a-Generation Investment Opportunity: Explore the Rise of Artificial Intelligence in Tesla
Investing Now in Tesla's Artificial Intelligence (AI) Revolution for Long-Term Returns
All eyes are on Tesla's production volume. But the company is making inroads in many AI-powered applications that appear overlooked right now. Excitement surrounding breakthroughs in artificial intelligence (AI) have led to major gains in the stock market over the last year. The tech-heavy Nasdaq Composite surged 43% in 2023, and is up 8% already so far this year.
Much of these gains, however, can be attributed to a small cohort of stocks collectively known as the Magnificent Seven -- a catchy moniker that includes Microsoft, Apple, Alphabet, Amazon, Nvidia, Meta Platforms, and Tesla (NASDAQ: TSLA).
More than a car business
The main knock against Tesla is that the company is nothing more than a car business. While producing a battery-powered vehicle differentiates Tesla from many legacy automakers, bearish investors will also contend that it's a costly endeavor. Nevertheless, Tesla's financial and operating results prove that there is a big market for EVs.
- In 2023, Tesla generated $96.8 billion in revenue, up 19% year over year.
- Roughly 85% of the company's sales stemmed from the car business, with the remainder coming from Tesla's energy storage and services operations.
- Tesla increased its net income by 19% last year, reporting $15 billion on a generally accepted accounting principles (GAAP) basis.
- With more than $29 billion of cash on the balance sheet, Tesla's diversified revenue model showcases its resilience in the face of economic challenges.
Rise of the robots
One of the more notable artificial intelligence (AI) projects Tesla is working on is in robotics. The company is developing a humanoid robot called Optimus, which it hopes to implement into factories in the long run. Should Tesla begin commercializing Optimus, humanoid robotics have an opportunity to upend manufacturing, logistics, retail, and more.
A billion miles of data and counting
Another opportunity where AI can play a role for Tesla is autonomous driving. With more than 1 billion miles of data collected, Tesla has an edge over the competition in developing and improving autonomous driving software models. Tesla's advancements in AI beyond selling cars present a long-term investment potential that investors shouldn't overlook.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.