There are always undervalued companies on the stock market, but there are even more opportunities today than a year or two ago. Not only are price-to-earnings multiples low for many companies, but growth opportunities aren't being appreciated either.
After a tough 2022, the market offered us a glimmer of hope recently. The three major indexes rallied in the first month of the year. And that's got all of us ready to welcome the next bull market. Are we being too optimistic? I don't think so. Here's why.
In this week's video, I cover everything you need to know about news related to Tesla (NASDAQ: TSLA) during the week of Feb. 6. Today's video will focus on Tesla's Master Plan 3, sales in China and California, and some technical analysis on the stock.
Comparing Tesla (NASDAQ: TSLA) to any other auto company can be difficult given the fervent following and wide-ranging ambitions of CEO Elon Musk. But Rivian (NASDAQ: RIVN) may be the next great EV company to follow in Tesla's footsteps.
It has been quite the start to the year for the Nasdaq 100, as it is up 14%. That run-up might scare some investors away from the index, but they should look deeper than the headline numbers.It can be useful to see how much room the highest-weighted companies in the index have to
Tesla CEO Elon Musk has often talked about opening his Supercharging network to competitors, but has never actually done so in the United States, where the company dominates the electric vehicle market.
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What happened
Shares of Tesla (NASDAQ: TSLA) were down 5.8% as of 2:05 p.m. ET on Friday. The stock was underperforming the Nasdaq Composite, down less than 1% at the time of this writing, following an exclusive report by Reuters that revealed the Department of Transportation was
What happened
Tesla (NASDAQ: TSLA) stock has been on a tear so far in 2023, and the shares were up another 9% this week at one point. But an end to a multiple-day streak of gains has tempered the rise for the week. As of midday Friday, Tesla shares were still holding a gain of ab
Conversational
artificial intelligence (AI) stocks are hot, while
electric vehicle (EV) stocks are just starting to show signs of life in 2023 after a poor performance last year. You're certainly welcome to invest in both of these markets, but contrarian investors might choose to allocate more of their capital into EV stocks than conversational AI stocks now.
Don't get me wrong - both machine learning and vehicle electrification are future-facing trends with tremendous growth potential. However, cautious investors should think about which niche market's rapid expansion potential has already been priced into stocks. So, let's start by taking a closer look at a few conversational AI stocks to see how much growth has already been baked into the proverbial pie.
Conversational AI Stocks: The Pure-Play Ones are Pricey
Many people first heard about conversational AI because they saw OpenAI's ChatGPT chatbot being mentioned in the headlines. Microsoft (
NASDAQ:MSFT
) is investing $10 billion in OpenAI and its
ChatGPT conversational AI software, while Google parent company Alphabet (
NASDAQ:GOOG
) (
NASDAQ:GOOGL
) is pushing back with Bard, another conversational AI chatbot.
However, these certainly aren't pure plays in the conversational AI space. There's a lot more to Microsoft than ChatGPT, and Alphabet has its hands in many more niche industries than conversational machine learning.
If you really want to go all-in on conversational AI, you might think about C3.ai (
NYSE:AI
), which recently launched a suite of generative AI tools. Others in this specific market to consider are SoundHound AI (
NASDAQ:SOUN
), which introduced a conversational AI platform called Dynamic Interaction, and BigBear.ai Holdings (
NYSE:BBAI
), which has a contract with the U.S. Air Force.
However, I would cross BigBear.ai off of the list because the company seems to be much more focused on cybersecurity-related machine learning than conversational AI. Still, the bigger issue is that the pure-play stocks -
AI,
SOUN, and
BBAI - all have gone parabolic in 2023 so far. I'm talking about gains in the hundreds of percentage points in a matter of weeks. If you're a true contrarian, then the charts of these stocks should make you think twice about jumping into the trade now.
If I had to choose a conversational AI stock right now, it would probably be C3.ai because it's a bigger and more established pure-play machine learning business than SoundHound AI and BigBear.ai. So, let's see what analysts have to say about C3.ai stock.
What is the Price Target for C3.ai Stock?
AI has a Hold consensus rating based on two Buys, two Holds, and three Sell ratings assigned in the past three months. The average
C3.ai stock price target of $16.50 implies 26.5% downside potential.
EV Stocks are Way Down but Curling for a Comeback
Unlike pure-play conversational AI stocks, EV stocks are generally far below their prior peak prices. The most obvious example would be Tesla (
NASDAQ:TSLA
) stock, which topped out above $400 but is now close to $200.
TSLA's stock chart is exactly what value investors should look for -- a major discount to the previous high price, but also not a falling knife as the buyers recently stepped in to push the stock back up.
You'll see a similar shape in Ford's (
NYSE:F
)
stock chart as well as General Motors' (
NYSE:GM
)
stock chart. Ford and GM aren't pure plays in the EV industry quite yet, but they're heading in that direction. It shouldn't be too surprising if both of these automotive giants release new and upgraded EVs this year.
Still, Tesla is the purest of pure plays in EV manufacturing, and TSLA stock didn't go vertical like the conversational AI stocks did. Moreover, Tesla stock has plenty of Buy ratings on Wall Street, so let's delve into the analyst consensus on Tesla now.
What is the Price Target for Tesla Stock?
On Wall Street, TSLA has a Moderate Buy consensus rating based on 21 Buys, six Holds, and three Sell ratings assigned in the past three months. The average
Tesla stock price target of $198.85 implies 1.8% upside potential.
Conclusion: EV Stocks Aren't as Overbought as Conversational AI Stocks
There's nothing wrong with owning shares of both conversational AI stocks and EV stocks. These two industries have room to expand in 2023 and beyond.
If you truly believe in "buy low, sell high," however, then you might choose to allocate more to EV stocks than conversational AI stocks. Then, be watchful and nimble: If the tides turn and EV stocks reach new highs while conversational AI stocks decline, it's possible to reallocate as a response to any share-price shifts that may occur.
Disclosure
Tesla CEO Elon Musk has often talked about opening his Supercharging network to competitors, but has never actually done so in the United States, where the company dominates the electric vehicle market.
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