Investor Brad Gerstner bought notable first-quarter underperformers Tesla and Alphabet on the dip

Published Wed, Mar 27 20241:38 PM EDTUpdated Wed, Mar 27 20242:53 PM EDT

Altimeter Capital's Brad Gerstner is betting on some of the first quarter's biggest technology underperformers, revealing fresh Alphabet and Tesla stakes during an interview with C NBC's "Halftime Report" on Wednesday. Both Alphabet and Tesla have lagged most of their "Magnificent Seven" peers year to date as they grapple with a slew of company-specific headwinds. Alphabet is up 7%, while Tesla has slumped 27%. By comparison, both Nvidia and Meta Platforms have surged 82% and 39%, respectively. GOOGL YTD mountain Alphabet shares in 2024 The underperformance at Alphabet has stemmed from a slew of missteps in artificial intelligence technology, including flaws that forced the company to pull its Gemini AI image generator from the market. Meanwhile, Tesla has contended with slowing growth and muted demand for electric vehicles, and competition in China. Despite the recent mishaps, Gerstner views Alphabet as a "super capable" company with "extraordinary resources," highlighting monetization potential within search among the reasons for diving back into shares. "The jury's out on it," he said. "I would put it in a bucket of a trade that we hope to turn into an investment, but we still need to see those changes and we need to see you know how this evolves" with competition that's forced the company to be on its "A game." The tech investor also cited recent commentary from Alphabet CEO Sundar Pichai calling for "structural changes" at the search giant as one of the key drivers that lured him back to the stock. For Tesla, Gerstner cited faith in CEO Elon Musk and the recent launch of its latest full self-driving offering, saying the company is making "massive progress at an accelerating rate" on the tool. TSLA YTD mountain Tesla stock this year Despite some difficulties in China and the potential for Tesla to miss upcoming delivery numbers, Gerstner views much of the negativity as already priced in. "This is not for the faint of heart," he said, adding that investors need to willingly buy more shares on pullbacks. "But betting on Elon Musk, particularly in the age of AI, where he is building market-leading AI and market-leading models around these cars, I think is a bit of a no-brainer."