Stock Market

Is Tesla Stock a Buy, Sell or Hold? Here’s My Call.

Electric vehicle (EV) manufacturer Tesla (NASDAQ:TSLA) certainly uses artificial intelligence (AI) to its advantage. However, this doesn’t automatically mean TSLA stock should be classified as an AI stock. Nevertheless, Tesla’s loyal investors can remain optimistic about the future prospects of the company and the stock.

On May 12, I declared, “It’s definitely not too late to start a long position in Tesla stock.” The stock has rallied since then, so I feel pretty good about my bullish call.

Am I prepared to stand by that call now, though? Keep reading to discover the latest buzz about Tesla and whether it’s bullish, bearish or neither.

Don’t Pigeonhole TSLA Stock as an AI Stock

Speaking of buzz, it seems like everybody and their uncle is hyped up about machine learning nowadays. Due to the popularity of OpenAI’s ChatGPT chatbot, many investors are eager to buy practically anything with an AI connection.

However, Morgan Stanley analyst Adam Jonas is reluctant to categorize Tesla stock as an AI stock. Although it may be “tempting to speak in platitudes about Tesla’s AI chops,” Jonas explains, the direction of the automaker’s stock “will be dominated by the supply and demand of electric cars over the next 12 months” (as paraphrased by Bloomberg).

Don’t get the wrong idea. Jonas is a long-standing Tesla bull. And Tesla does have AI connections, especially with the company’s self-driving software and Optimus robot. However, it’s important for investors to own TSLA stock for the right reasons — and to bear in mind that Tesla isn’t a generative AI business like OpenAI.

“With such an expansive total addressable market (TAM), Tesla can be considered many things. But we think it’s an auto company,” Jonas clarified. I agree 100%. Tesla is a market-moving and consistently profitable EV maker, first and foremost.

A Surprising Partnership

Tesla and rival automaker Ford (NYSE:F) should be sworn enemies, right? In actuality, the two companies recently found common ground and forged a partnership that many people probably didn’t expect.

Here’s the rundown. Per Yahoo! Finance, starting in 2024, “Ford EVs will have access to 12,000 Tesla Superchargers in North America, via a Tesla-supplied adapter.” After that, starting in 2025, “all new Ford EVs will ship with Tesla’s NACS (North American Charging Standard) charging connector,” instead of the “CCS standard which most other EV automakers have been using.”

Without a doubt, plenty of jaws dropped when this collaboration was announced. Yet, this partnership makes perfect sense. It’s a win-win for Ford and Tesla to enable inter-compatibility when it comes to EV charging capabilities. This drives Jonas’s point home: Tesla is a forward-thinking vehicle manufacturer, not a bandwagon-jumping AI business.

So, Is Tesla Stock a Buy, Sell or Hold?

Clearly, Tesla is still a future-facing EV manufacturer that’s not afraid to surprise its critics. The arrangement with Ford might shock some people, but it’s sensible and should benefit both companies.

Therefore, even if TSLA stock really isn’t an AI stock, it’s still a hold in my book. And if you don’t have a share position in Tesla, now’s a great time to conduct your due diligence on the company and consider a small investment.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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