By Paul R. La Monica

Bad news for Elon Musk and Jensen Huang? Tesla and Nvidia were the two stocks overwhelmingly chosen by participants in the latest Barron's poll of professional investors as their least favorite.

Fifteen of the 119 survey participants said Nvidia was the stock they thought was most overvalued in the market. That made it the second-least popular stock, trailing only Tesla, chosen by 30 respondents as most overvalued. Almost 40% of the Big Money pros said that either Tesla or Nvidia is their least favorite stock.

In fact, market experts are skeptical about a comeback for top tech stocks in general. Less than a third of the poll's participants said they thought the Magnificent Seven -- Apple, Amazon.com, Alphabet, Microsoft, and Meta Platforms, along with Tesla and Nvidia -- would lead the market over the next 12 months.

Barron's conducted the spring Big Money poll of professional investors during the end of March and first half of April, with the help of Erdos Media Research in Ramsey, N.J.

Investors concerned about Nvidia are likely worried about the impact of a potential trade war with China, as well as new competition from lower-cost artificial intelligence technology such as China's DeepSeek.

Nvidia has its supporters, too. Six survey participants chose it as their favorite stock for the next 12 months, making it the most liked stock among those polled, ahead of Warren Buffett's Berkshire Hathaway.

The optimism about Nvidia makes sense given how far the stock has fallen. The stock's 15% decline this year has made its valuation more reasonable. Nvidia now trades for 26 earnings estimates, well below its 5-year average P/E of 47.

Harris Nydick, managing member and co-founder of CFS Investment Advisory Services and one of the Nvidia fans, said he understands why investors are nervous that tension with China will upset Nvidia's revenue stream. He added that Nvidia has proven to Wall Street time and time again that it can adapt.

"It's a cat with nine lives. Any stock is going to have question marks given the uncertainty out there, but Nvidia has a history of being quick to pivot," he said. "It used to be the company making chips with gaming machines. Then it was Bitcoin mining. Now they are heavily into AI."

Nydick is confident that Nvidia will figure out how to satisfy demands from the U.S. and China and remain a leading supplier of AI chips for the global market. "If Nvidia is told the rules, they'll find a way to play the game," he said.

As for Tesla, there wasn't nearly as much optimism among the Big Money survey participants. Only one respondent chose Tesla as the most undervalued stock, even though it is down nearly 30% this year.

Musk's alliance with President Donald Trump and work with the so-called Department of Government Efficiency, or DOGE, was frowned upon by several poll participants. "Unfortunately the company has a brand issue right now. A very significant one," said SK Wealth Management chief investment officer Matthew Neyland, who calls Tesla overvalued. "We have clients who own Tesla stock asking for exit plans."

Charles Zhang, founder and president of Zhang Financial, and Sandra S. Martin, managing director with Martin Investment Management, who also listed Tesla as the most overvalued stock, both noted that Tesla, trading at more than 135 times 2025 earnings estimates, is simply too pricey given the headline risks and worries about weaker sales.

"Tesla's valuation is still high even after the stock has come down so much," Martin said.

Tesla and Nvidia may be the least liked stocks. But they're not the only ones shunned by Big Money participants. Bitcoin investor MicroStrategy and big data broker Palantir were also popular stock pans.

Eric Green, chief investment officer with Penn Capital Management, said that MicroStrategy's market cap is now twice the net asset value of the Bitcoin on its balance sheet. "You're better off owning Bitcoin," Green said.

As for Palantir, Jose Medeiros, managing partner with Stonerise Capital Partners, said his negative call on the stock is "purely" about the fact that it trades at more than 200 times earnings estimates.

"Palantir is an amazing business. It has expanded and evolved. I'm not pooh-poohing it as a company, but you really have to believe a lot to get a return at these valuations," he said.

Newly public Newsmax, the conservative-leaning cable TV news and social media network, was also highlighted as an overvalued stock by several poll participants. The company went public in late March and quickly soared as much as 2,550% before plunging. But it's still trading more than 130% above the IPO price of $10 a share.

Trump Media & Technology Group, the owner of Truth Social, was chosen by two respondents as being most overvalued. It was one of the least liked stocks in the spring and fall Big Money polls last year.

But Big Money participants seem more concerned now about Trump's trade policies, which remain the biggest wild card for the broader market going forward. Brett Kramer, chief investment officer with Pinnacle Investment Advisors, thinks stocks could easily fall back toward their early April lows. "Tariff negotiations may be over in 90 days, but they could take longer," he said.

If that is the case, that would be more bad news for Tesla and Nvidia. Both companies generate a healthy chunk of their total sales from overseas markets, including China.

Write to Paul R. La Monica at paul.lamonica@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 04, 2025 04:00 ET (08:00 GMT)

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