Forget Tesla: 3 Stocks to Ride the Elon Musk Effect

Key Points

• NVIDIA is an obvious beneficiary of the "Musk effect," and that’s why investors should look beyond the sky-high valuation.
• Modine Manufacturing provides key technology that Tesla and other EV makers can’t function without.
• PayPal was Musk’s first love, and the company looks like a solid buy as it returns to its innovative roots.

Elections have consequences, but they also create opportunities. With the 2024 election in the rearview mirror, Elon Musk is making headlines for many reasons unrelated to his multiple businesses. However, Musk still casts a large shadow among technology stocks. And now is a good time for investors to consider how to profit from the "Musk effect."

Elon Musk is one of the most widely recognized billionaires in the world. And putting aside his or your politics, there’s no denying that Musk has a Midas touch when it comes to innovation. With Tesla Inc. NASDAQ: TSLA, Musk almost single-handedly created the electric vehicle (EV) industry. But that’s only a fraction of what Tesla may become. His Space-X venture, while privately held, is one of the most compelling companies in the emerging space economy, which was valued at around $600 billion in 2024, according to McKinsey.

That innovation can trickle over and put a shine on other companies. Here are three stocks you should consider if you’re looking for ways to invest in companies that may benefit from the Musk effect.

As If You Needed Another Reason to Own NVIDIA

NVIDIA Corp. NASDAQ: NVDA is one of the best-performing stocks in the AI revolution. Investors are concerned about the lofty valuation and premium they’re paying for the company’s shares. But even with the stock down about 2% in 2025 as of February 13, it’s still up more than 81% over the last 12 months.

Much of the excitement is due to the company’s importance to the buildout of data centers. However, its hardware will be essential to Musk’s and Tesla’s autonomous driving ambitions. In support of that, Musk said that he planned to spend between $3 billion and $4 billion on NVIDIA hardware last year. And as investors know, that’s not just a one-time investment.

And that’s from only one company. Analysts from Bank of America NYSE: BAC forecast that NVIDIA could capture more than 75% of the $90 billion AI accelerator market. That analysis is backed up by a list of over a dozen partnerships that NVIDIA has in the advanced mobility market.

Things Are Still Heating Up For This Musk-Adjacent Company

Modine Manufacturing NYSE: MOD may not be familiar to many investors. But the company’s relationship with Tesla and other EV makers makes it one to watch.

Modine is a leader in providing thermal management solutions. It specifically provides battery chilling units for Tesla and has been since the company’s first model came off the production line. Battery chillers are a critical component to prevent lithium-ion batteries from exploding.

MOD stock is down 19.18% in early 2025. However, investors need to put this in the context of a stock that’s had a run-up of over 1,000% in the last five years. The stock looks like it’s trying to find a bottom after the company’s earnings report on February 4. At that time, the company beat on the top and bottom lines. Analysts give the stock a consensus Buy rating with a $146.67 price target. That would be a 56% increase from the stock’s current price.

Elon's First Love Looks Ready to Ramp Up Growth

PayPal Holdings Inc. NASDAQ: PYPL is long past the days when Elon Musk owned it. The payment processing company was an innovator that initiated the growing financial technology (fintech) sector.

PYPL stock surged in 2020 and 2021 as millions of workers decided to give their side hustles a shot. But it’s been a different story as inflation, rising interest rates, and the reopening of the economy have impacted many small businesses. PayPal is also facing direct competition and has been somewhat slow to react.

However, PayPal continues to be one of the most used digital apps in all generations. The company is also rediscovering its innovative roots and adopting new features, such as an enhanced checkout program and a plan to monetize its advertising that should provide value to shareholders.

PYPL stock is down 11.13% in 2025, but analysts give it a Moderate Buy rating with a consensus price target of $90.52, which would be an 18.2% upside.