Summary
- Morgan Stanley raised Tesla’s price target to $430 per share
- The firm adjusted its valuation due to Tesla’s advances in autonomous driving and artificial intelligence
- Analysts at Morgan Stanley provided a bull case valuation of $800 per share and a bear case valuation of $200 per share for TSLA
- Tesla’s mobility fleet is expected to grow to 7.5 million vehicles by 2040
- Analysts highlighted the potential of Tesla’s autonomous vehicle business and the role of embodied AI in the company’s success.
Article
Morgan Stanley has raised its price target for Tesla (TSLA) stock from $400 to $430 per share, with a bull case valuation of $800 and a bear case valuation of $200 per share. The increase in valuation is attributed to Tesla’s advancements in its autonomous driving program and work in artificial intelligence. Analysts believe that Tesla’s autonomous vehicle business has significant potential, with the company’s mobility fleet expected to grow to 7.5 million vehicles by 2040, generating estimated revenues of $1.46 per mile and a 29% EBITDA margin.
Analyst Adam Jonas highlighted the importance of embodied AI in Tesla’s future success, noting that it could drive upside potential to the revised bull case valuation of $800 per share. He also mentioned that Tesla could launch its unsupervised autonomous vehicle fleet in a city setting by next year, although widespread deployment might not occur until after 2030. Investors are beginning to recognize Tesla’s advantages in terms of data collection, robotics, energy storage, AI/compute, manufacturing, and infrastructure, as well as the benefits of collaboration with Elon Musk’s other companies such as SpaceX and xAI.
The financial services firm sees 2025 as a year where the market’s appreciation for Tesla’s unique combination of skills can be further reflected in the company’s stock multiple. Despite the challenges in the electric vehicle market expected for FY25, Morgan Stanley believes that Tesla’s Total Addressable Market (TAM) aperture will continue to expand into broader domains that are not yet included in traditional financial models. The firm remains bullish on Tesla’s prospects and has reiterated its Top Pick designation for the stock.
Investors are increasingly interested in autonomous vehicles (AVs), leading Morgan Stanley to update its valuation of Tesla based on the potential growth of the company’s mobility fleet. The firm sees embodied AI as a key driver for Tesla’s upside potential, highlighting the increasing relevance of AI in a competitive and complex geopolitical environment. Tesla’s recent share price appreciation is seen as reflecting the expanding “surface area” between the company and physical AI, including its natural advantages in various technological areas.
Tesla’s advancements in autonomous driving and artificial intelligence have caught the attention of Morgan Stanley analysts, leading to an upward revision of the company’s price target. The firm sees Tesla’s autonomous vehicle business as a key driver of future growth, with the potential for significant revenue generation from a growing mobility fleet. The analysts are optimistic about Tesla’s prospects in the coming years, envisioning continued expansion into new domains and recognition of the company’s unique skill set by the market.
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