Wall Street is torn on one of these self-driving car inventory, but says to buy another because it can double

Of course, investors have developed interest in companies engaged in unsupervised fully autonomous driving (FSD) capabilities, as they may be on the cliff of large new industries. Participants entering new markets in the early stages can quickly gain market share and attract attention, resulting in the first step of advantage.

Although we are not at the level of commercialization, several companies have built this technology for cars to keep themselves unsupervised. FSD Technology The two companies engaged in FSD technology are The pony is here (Nasdaq: Pony) and Tesla (NASDAQ: TSLA). Wall Street has been torn apart one of the stocks but says it wants to buy another because it can double from its current level.

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Few companies are more controversial this year than Tesla, largely due to the company's CEO Elon Musk, who shut down many clients and investors for his involvement in government affairs, especially the Department of Government Efficiency (DOGE). Some believe Musk's politics has alienated customers and damaged the brand. Tesla's first-quarter delivery was 337,000, the lowest level since 2022, to no avail.

But a large part of Tesla and its sublime valuation is that the company can bring FSD technology to the masses. Its team of engineers has built the technology and has reportedly conducted more than 50,000 autonomous mileage tests. Investors are in a major demonstration in June in Austin, Texas, where residents are said to be able to ride in the self-driving model Y.

During Tesla's first-quarter earnings call, Chief Financial Officer Vaibhav Taneja called the company's FSD technology "safer than human drivers." Musk said he believes FSD will be available for personal use soon:So the acid test is... Can you sleep in the car and wait to your destination? And I am confident it will be available in many cities in the United States by the end of this year. ”

Many are excited about these prospects, but analysts still seem to be frustrated by the stock. According to Tipranks, 37-year-old Wall Street analysts have published research reports in the past three months, 16 of whom said they wanted to buy stocks, 10 said they held and recommended selling 11 people. The average price target means that the current level (as of April 30) is about 3%.

Musk's schedule on FSD seems ambitious and I'm not surprised to see the delay, but Tesla is still a group that is far away in the process, which is certainly worth it. However, there are still many uncertainties in the future of FSD, including adoption and regulations.

I also want to think that the hype of FSD and other future plans of Tesla has been integrated into the company's high valuation, which is 135 times the forward earnings. That's why it's easier for me to stay on the field.

Although Tesla has been around for some time and has a market value of about $884 billion, Pony AI seems to be a challenger, with a market value of just over $3 billion. The company has been impressive lately, more than double its stock since late April.

Xiaoma AI swept the world of autonomous driving when it announced its seventh-generation system at the Shanghai Auto Show, which left a deep impression on investors. Management touts the security of its new software, claiming it is safer than human drivers.

Pony CEO James Peng also told South China Morning It has an advantage over competitors like Waymo because the technology is more integrated. But perhaps the biggest kicker is management that it can build the latest FSD system 70% cheaper than before.

His company also recently announced new partnerships with large Chinese technology companies Tencentwhich will help the road to rapid track commercialization. Through the partnership, Pony AI will leverage Tencent’s Super App, WeChat and its online mapping technology.

Now, it doesn't hurt that people with Sword Saints essentially support the company. While not so many Wall Street analysts cover Pony, at least three have published research reports about the company since the end of last year.

This means that the stock of pony can double from its current level. To our knowledge, the company apparently appears to be a leader in the field of autonomous driving, now on the road to commercialization and a better way to make a profit.

Given the huge loss of money in 2024, Pony AI is still a bit risky, but there may be a lot of room for upwards, so investors can at least take a bite here.

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Bank of America is an advertising partner for Motley Fool Money. Bram Berkowitz has no position in any of the stocks mentioned. Motley fools have positions at Bank of America, Goldman Sachs, Tencent and Tesla. Motley Fool has a disclosure policy.

Pony AI vs. Tesla: Wall Street is torn on one of the self-driving cars stocks, but says to buy another because it can double, originally published by Motley Fool