‘Keep on Buying,’ Says Morgan Stanley About Tesla Stock

Tesla (NASDAQ:TSLA) stock is back in focus as Elon Musk shifts gears, stepping away from political headlines and returning his attention to the company that made him a household name.

The move was no doubt greeted enthusiastically by Tesla investors, who have grown frustrated with Musk’s high-profile distractions since becoming Trump’s “first buddy.”

But beyond the optics, Morgan Stanley analyst Adam Jonas, a longtime Tesla bull, believes there’s more at stake, pointing to broader strategic implications tied to Musk’s renewed commitment.

“In our view,” Jonas noted, “Tesla’s expertise in manufacturing, data collection, robotics/ physical AI, energy, supply chain and infrastructure are more critical than ever before to put the US on an even footing with China in embodied AI.”

Jonas points to China’s rapid progress in humanoid robotics – what he calls the “Humanoid Olympics.” After showcasing robots running a half marathon and competing in combat sports, China is now moving toward full-on humanoid games.

“China’s gamification of robotic innovation is accelerating its path to AI supremacy,” says Jonas, who wonders if the US should fight back with a “Humanoid Ninja Warrior.”

The specter of Chinese EV maker BYD looms large too. The company announced significant price reductions across its entire lineup recently – ranging from 10% to nearly 30%. Notably, the price of its budget-friendly Seagull model was slashed to just RMB 55,800 (under $8,000).

“If you want evidence of the ‘race to the bottom’ in global EV prices, look no further,” says Jonas.

The analyst also wonders if Musk might be having a change of heart regarding one possible business venture. For years, he has dismissed the idea of Tesla building eVTOLs or drones, pointing to concerns like noise, privacy issues, public nuisance, and inadequate battery energy density. However, during a recent all-hands meeting, when asked about the possibility of making a plane, Musk paused before replying that the company is currently “stretched pretty thin.” “In our opinion,” says Jonas, “that’s a decidedly different type of answer. Is Tesla an aviation/defense-tech company in auto/consumer clothing?”

As for the upcoming Cybercab launch, slated for June 12, as with most highly anticipated Tesla events, Jonas thinks it’s best to keep a lid on expectations. That said, he’ll be watching closely for ongoing updates in the following days and weeks – particularly regarding network performance and growth metrics like vehicle count, mileage, and trip volume.

All in all, Jonas remains on TSLA’s side, assigning an Overweight (i.e., Buy) rating with a $410 price target, implying potential upside of 18% from current levels. (To watch Jonas’s track record, click here)

That’s a bull’s take, but not one the majority of Wall Street analysts share; TSLA stock only claims a Hold consensus rating, based on a mix of 16 Buys, 10 Holds and 11 Sells. Going by the $282.70 average price target, a year from now, shares will be changing hands for an 18% discount. (See TSLA stock forecast)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.