We recently published a list of 12 Best FAANG+ Stocks to Invest in Right Now. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other best FAANG+ stocks to invest in right now.
The group of stocks formerly known as FAANG were synonymous with technological prowess, market dominance, and high growth. These companies provided exponential returns and offered the chance to be part of the technological revolution. Their rise to dominance was fueled by innovation, digital transformation, the increasing use of the internet, and their insatiable hunger for growth. In the process, they reshaped industries, altered consumer behavior, and redefined customer engagement. However, over the past couple of years, the acronym has lost some of its relevance as some names have changed and new companies have encroached on the territories of these mega-caps. As a result, the market has started using the term “Magnificent Seven” to better represent the most valuable tech stocks. In this list, we include the ‘Magnificent Seven’ plus five interesting stocks that focus on the transformational technology growth trends such as artificial intelligence, cloud computing, EV technology, and streaming.
Let’s begin by understanding the sheer magnitude of these stocks. We created an equal-weighted portfolio (equal investment in each stock) of all 12 mega-cap technology stocks in this list and compared their combined performance with the S&P 500 Index over the past 5 years. Astonishingly, the mega-caps portfolio has returned over 385% compared to the S&P 500 Index’s return of around 86%. Additionally, these 12 stocks now have a combined market cap of over $20.0 trillion, with around $14 trillion added in the past 5 years. In comparison, the total market cap of all US-listed stocks is approximately $60.5 trillion (as of December 2024; source: Wilshire 5000 Index), making these mega-caps account for nearly one-third of the total US market value. Although it’s not entirely fair to compare market caps to GDP, if we could, and if these 12 mega-caps formed a country, they would rival China as the second or third largest country by nominal GDP.
Despite recent intense competition, challenging market dynamics, and a difficult regulatory environment, these tech leaders still stand tall with their legacy of innovation and digital transformation. We believe their substantial investments in technology infrastructure, strategic acquisitions, international expansion, and continuous innovation have helped them maintain their dominance. Additionally, the rise of artificial intelligence and machine learning has opened new avenues for growth among these tech giants. With that, let’s explore these 12 stocks.
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Out Methodology
To identify the 10 best FAANG+ stocks, we compiled a list of U.S.-listed technology companies with largest market capitalization, along with the stocks from the FAANG acronym. Ultimately, the stocks were ranked in ascending order based on their market capitalization, with the stock having the highest market capitalization ranked at the top.
Note: All pricing data is as of market close on January 31.
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Is Tesla Inc. (TSLA) the Best FAANG+ Stock to Invest in Right Now?
Our next pick Tesla, Inc. (NASDAQ:TSLA) is not a Technology company in a stricter sense. But its exposure to electric vehicle (EV) tech, autonomous driving and AI makes it nothing less than a tech play. The company is an EV manufacturer and clean energy company known for its innovative approach to sustainable transportation and energy solutions. It designs, manufactures, and sells electric vehicles, battery energy storage systems, solar products, and related services. It currently manufactures five different consumer vehicles: the Model 3, Y, S, X, and the Cybertruck. Tesla, Inc. (NASDAQ:TSLA) benefits from the alignment of global goals with its mission of accelerating the world’s transition to sustainable energy. Its market cap currently stands at $1.3 trillion, a phenomenal 9x growth from $139 billion five years ago. At a recent conference call, CEO Elon Musk predicted that, with the help of autonomous vehicles and humanoid robots, Tesla has the potential to become the most valuable company in the world, surpassing the combined value of the next top five companies.
In January 2025, Tesla, Inc. (NASDAQ:TSLA) reported its Q4 2024 results, with vehicle deliveries of around 500,000 in the quarter, contributing to a total of approximately 1.8 million deliveries for the year 2024. Tesla continues to benefit from increasing demand for electric vehicles and advancements in battery technology. The company is currently focusing on reducing costs and improving margins through vertical integration, including in-house battery production. Additionally, the company’s software capabilities, such as Full Self-Driving (FSD) technology, are expected to enhance vehicle value and customer experience. Recently, the CEO confirmed that unsupervised FSD is planned for release in California in 2025, with potential releases in China and Europe by year-end.
Overall, TSLA ranks 7th on our list of best FAANG+ stocks to invest in right now. While we acknowledge the potential of TSLA to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
