Tesla vs. Nvidia: Wall Street's Divided on These Tech Titans

Ladies and gentlemen, buckle up! We're diving headfirst into the electrifying world of tech stocks, where Tesla and NVIDIA are battling it out for investor attention. The market is on fire, and these two giants are at the center of the action. But which one should you be buying? Let's break it down!

First up, let's talk about Tesla. The electric car king has been on a wild ride, with shares surging and plunging like a roller coaster. The current share price is $292.98, and analysts are split on whether to buy, hold, or sell. Some see it as a battleground stock, with upcoming catalysts like the robotaxi and robot initiatives. But others are wary of its expensive valuation and the potential for volatility. The Score for TSLA is 25, which is 50% below its historic median score of 50, and infers higher risk than normal. TSLA is currently trading in the 20-30% percentile range relative to its historical Stock Score levels. This Score is currently showing a lower than normal reading, suggesting risk levels may be somewhat higher than normal and additional caution is warranted. Tesla trades at about 86 times forward earnings and analysts on average expect to see earnings grow by 17%, according to data provided by Visible Alpha. Wall Street analysts are split on whether or not to buy the stock. Of the 36 analysts who have issued a research report, 12 say to buy the stock, 13 say hold, and 11 say sell. The average price target implies 41% upside. This suggests that while there is potential for growth, the high valuation and mixed analyst sentiment could make the stock more volatile.

Now, let's shift gears to NVIDIA. The AI chip king is a different story altogether. With a current share price of $124.92, NVIDIA is trading at 26 times forward earnings, down from peaks of over 50 in recent months. Analysts on average expect the company to grow earnings by about 48% in its fiscal year 2026. Of the 42 analysts who have issued research reports on the company over the last three months, 39 assign the stock a buy rating, while three say hold. The average price target implies nearly 50% upside. The Score for NVDA is 51, which is 2% above its historic median score of 50, and infers lower risk than normal. NVDA is currently trading in the 50-60% percentile range relative to its historical Stock Score levels. This Score is currently showing a higher than normal reading, suggesting risk levels may be somewhat lower than normal. This strong earnings growth and positive analyst sentiment could drive investor confidence and potentially lead to higher stock prices for NVIDIA in the coming quarters.



So, which one should you be buying? If you're looking for growth, growth, growth, NVIDIA is the clear winner. Its robust earnings projections and positive analyst sentiment make it a no-brainer. But if you're feeling bullish on the electric vehicle revolution and can stomach the volatility, Tesla might be the play for you. Just remember, this is a battleground stock, and you need to be ready for the fight.

In conclusion, the tech-heavy Nasdaq Composite is down over 8% this year, and investors are starting to look for opportunities. Some of the most popular stocks like those in the "Magnificent Seven" haven't been on sale for more than two years, and perhaps their valuations are now more favorable. Few stocks have been more popular than the artificial intelligence chip king Nvidia(NVDA -0.75%) and the electric carmaker Tesla(TSLA 5.33%), which are down 13% and 38%, respectively, this year. Per usual, Wall Street analysts are on top of these names and have been updating their views and price targets since both stocks have declined. Certain analysts say to buy one of them and sell the other. Let's take a look. Tesla has become a battleground stock, as investors grapple with upcoming catalysts related to the company's robotaxi and robot initiatives versus its expensive valuation. Tesla trades at about 86 times forward earnings and analysts on average expect to see earnings grow by 17%, according to data provided by Visible Alpha. Wall Street analysts are split on whether or not to buy the stock. Of the 36 analysts who have issued a research report, 12 say to buy the stock, 13 say hold, and 11 say sell. The average price target implies 41% upside. This suggests that while there is potential for growth, the high valuation and mixed analyst sentiment could make the stock more volatile. Analysts say Nvidia is an overarching buy, while investors are torn on Tesla. Of the 42 analysts who have issued research reports on the company over the last three months, 39 assign the stock a buy rating, while three say hold. The average price target implies nearly 50% upside. The emergence of DeepSeek earlier this year, a Chinese start-up that allegedly managed to create a similar chatbot as ChatGPT at a far lower cost and with older Nvidia chips, sent the stock and the broader AI sector for a loop. Investors wondered whether the industry would need the same chip technology and computing power as initially believed. Furthermore, Nvidia is potentially dealing with more strict export restrictions on its chips, as both former President Joe Biden's administration and the Trump administration have sought to prevent China from gaining certain artificial intelligence capabilities. However, Nvidia CEO Jensen Huang continues to brush off threats from DeepSeek, suggesting that the technological innovation will mean more demand for Nvidia's products and not less because the more data AI has the smarter the algorithms become. At a recent conference, Huang said that spending on data centers could reach $1 trillion. Analysts seemed to have liked what they heard. " ... Nvidia is continuing to deepen its competitive moat in a $1 trillion-plus infrastructure/services total addressable market," Bank of America analyst Vivek Arya said in a research note following the conference. Nvidia now trades at 26 times forward earnings, down from peaks of over 50 in recent months. Analysts on average expect the company to grow earnings by about 48% in its fiscal year 2026. While I'm not the biggest buyer of AI stocks, this setup looks a lot more favorable than in the past.