According to foreign media reports, Morgan Stanley recently reiterated that it listed Tesla as its first choice for U.S. auto stocks, saying that even if the company’s core electric vehicle business is not going well, its efforts in the fields of artificial intelligence and robotics may also drive the company to grow. The news pushed Tesla’s stock price to rise by 2%.
The report comes from Morgan Stanley analyst Adam Jonas, who has long been optimistic about Tesla. Despite pressure on Tesla’s auto sales due to high U.S. borrowing costs and fierce competition from Chinese automakers, including BYD, Jonas still praised the company’s efforts outside of the auto business.
Industry data shows that Tesla’s sales in Europe fell by 45% in January this year, while total electric vehicle sales in the region increased by 37% during the same period.
However, Jonas said Tesla’s recent setbacks, including its first annual delivery decline in 2024, marks the company’s transition from “pure automaker to highly diversified business in the fields of artificial intelligence and robotics.”
In October 2024, Tesla showed off its driverless taxi, while Musk also vigorously promoted the progress made by its humanoid robot “Optimus”, which could ultimately sell for between $20,000 and $30,000. Musk had previously said that Tesla will launch driverless ride-hailing services in California and Texas this year, but did not disclose more details.
So, Jonas reiterated his target share price for Tesla at $430, one of the highest target shares given by Wall Street to Tesla.
Jonas’ remarks echo the views of Tesla CEO Musk. Over the past year, Musk has shifted Tesla’s business focus to the fields of autonomous taxis and artificial intelligence. However, experts believe that it may take years for autonomous taxis to be used at scale due to regulatory barriers and technical limitations.
This is not the first time that Jonas has made a bold prediction about Tesla. In September 2023, he said that Tesla’s Dojo supercomputer’s progress in the field of autonomous taxis could increase its market value by nearly $600 billion.
Since then, Tesla’s market value has risen by about $150 billion to nearly $950 billion. But since the beginning of this year, Tesla’s stock price has lagged behind the US market. As optimism about Tesla’s prospects initially waned by Trump’s election, people turned to concerns about declines in Tesla’s sales and Musk’s close engagement with the White House, its stock price has fallen 27%.
While Musk promises to see sales growth in 2025 by launching cheaper models, Jonas said Tesla delivery could still decline in 2025, which would provide an “attractive buying opportunity.”