Morgan Stanley affirms ‘overweight’ amid AI growth and political tailwind from Trump administration

On November 14, 2024By Littum

We have recently compiled a list of 15 AI news that broke the internet. In this article, we will take a look at where Tesla, Inc. (NASDAQ:TSLA) faces the other AI stocks that broke the Internet.

A conversation gaining traction in Silicon Valley these days is how the development of Generative AI models is slowing down. Deirdre Bosa takes a look at the matter in CNBC’s TechCheck and reveals how rapid genAI progress is now showing signs of deceleration. She notes how the quality of improvements in OpenAI’s upcoming model, Orion, is expected to be less than the jump from ChatGPT-3 to ChatGPT-4. This smaller advance is largely due to a limited supply of training data, a key factor that can significantly influence how investors view AI companies.

Nevertheless, OpenAI CEO Sam Altman has boasted on X that ChatGPT is now the eighth largest website in the world by traffic. In October, ChatGPT had 3.7 billion visits, against Perplexity’s 91 million visits and Google Gemini’s 292 million visits. Nevertheless, the plateau in technological progress does not necessarily mean a slowdown. For example, Mark Zuckerberg suggests that there are many opportunities to build consumer enterprise applications on top of existing technology.

Although it is certainly a possibility, Reuters has reported that AI companies are seeking a new path to smarter AI due to the plateau. Ilya Sutskever, co-founder of AI labs Safe Superintelligence (SSI) and OpenAI, recently told Reuters that scaling up pre-training for AI models, which involves using large amounts of unlabeled data to learn language patterns, has reached a plateau.

“The 2010s was the age of scaling, now we’re back in the age of wonder and discovery again. Everyone is looking for the next thing. Scaling the right thing matters more now than ever.”

In light of this, researchers are now looking at a technique called “time testing compute” to improve models during the “inference” phase when such models are used. The technique will allow the model to test different possibilities instead of giving a single answer. The implications of the technique are far-reaching and have the potential to change the competitive landscape of AI hardware.

Fortune predicts GenAI funding will slow this year. However, it also believes that the industry’s latest breakthroughs are among the most profound technological advances of our time. Regardless of the slowdown in GenAI models, artificial intelligence continues to be a breakthrough in many industries today.

In its first, an artificial intelligence company will help publishers instead of trying to steal their work. Although AI is not highly valued in journalism because it apparently uses journalistic labor to feed chatbots’ data demands and in turn redirects less traffic to the publisher, a startup founded by Twitter engineers believes AI can be a valuable player in the media industry instead. Particle, an AI news reader, will help readers better understand the news using AI technology that offers more than just a summary.

In other developments, Perplexity, an AI-powered search engine, says it will start experimenting with ads this week.

“Ad programs like this help us generate revenue that we can share with our publisher partners. Experience has taught us that subscriptions alone do not generate enough revenue to create a sustainable revenue sharing program. Advertising is the best way to ensure a stable and scalable revenue stream .”

For this article, we selected AI stocks by reviewing news articles, stock analysis and press releases. These stocks are also popular with hedge funds.

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25 most in-demand cars heading into 2024

Market cap: $1.03 trillion

Tesla, Inc. (NASDAQ:TSLA) is an American multinational automotive and clean energy company that designs, develops, manufactures and sells fully electric vehicles, energy generation and storage systems. It leverages artificial intelligence to develop autonomous technologies and robots that have the potential to revolutionize manufacturing.

Tesla, Inc. (NASDAQ:TSLA) was one of the biggest analyst calls on Tuesday, November 12. Morgan Stanley reiterated the stock as an “overweight” and stated that it is holding on to the stock heading into the Trump administration. According to the company, Elon Musk’s public support for Trump has earned him a vote in the incoming administration, contributing to Tesla’s 40% stock gain. Firms like Wedbush have similar views on Tesla, saying how Trump’s return to the White House has the potential to unlock “$1 trillion of incremental AI valuation” for the company.

“As we look ahead to FY25 (and over the next 4 years), we expect to see TSLA’s TAM (total addressable market) opening expand into much broader domains, many of which are not included in buy-side or sell-side financial models for the company”.

Total TSLA rows 2 on our list of AI stocks that broke the internet. While we recognize the potential of TSLA as an investment, our conviction lies in the belief that some AI stocks hold greater promise to deliver higher returns and do so in a shorter time frame. If you’re looking for an AI stock that has more promise than TSLA but trades at less than 5 times its earnings, check out our report on cheapest AI stock.

Disclosure: None. This article was originally published on Insider monkey.