Morgan Stanley Projects Tesla Stock to Reach $430, Reaffirms Top Pick Amidst AI and Robotics Shift
By Ines Ferré, Senior Business Reporter
Published: March 3, 2025
Morgan Stanley’s Adam Jonas has set an optimistic price target for Tesla (TSLA), predicting that the electric vehicle (EV) manufacturer will reach $430 per share as it expands into artificial intelligence and robotics. This price target marks a potential 50% increase from Tesla’s recent closing price of $292.98. ## Strong Position Despite Recent Challenges
Jonas addressed the current volatility in Tesla’s stock price in a note released on Monday, March 3, during a period when shares had fallen about 28% over the previous month due to disappointing EV sales. Investors are concerned that CEO Elon Musk’s political endeavors may be alienating buyers, contributing to the decline in sales. On the day Jonas’s note was circulated, Tesla’s shares initially surged by 2% before settling down to a decline of 2.8%, reflective of a broader tech market sell-off.
Despite these challenges, Jonas emphasized that investors might find this a compelling moment to buy. He acknowledged that Tesla is facing difficulties with year-over-year delivery numbers but believes this creates "an attractive entry point" for potential investors.
Transitioning Business Model
Jonas reinstated Tesla as the top pick in the automotive sector, highlighting the company’s evolution from a traditional automotive manufacturer to a diversified technology leader with significant potential in AI and robotics. He elaborated that the opportunity presented by embodied AI in commercial applications may exceed that of autonomous vehicles, indicating a strategic shift in Tesla’s business focus.
"As we continue our analysis of the overlap of AI and robotics, it is increasingly clear that the commercial opportunity of non-auto expressions of embodied AI is likely far larger and faster-adopting than that of autonomous cars," stated Jonas in his report.
Impact of Market Competition and Leadership Decisions
Tesla’s stock performance has reflected broader concerns within the marketplace, including increasing competition from other EV manufacturers that have begun to cut into Tesla’s market share. Furthermore, there has been criticism surrounding Elon Musk’s involvement in politically charged situations, particularly regarding his role in the Trump administration. A recent Quinnipiac poll indicated that more voters disapprove of Musk’s political outreach than support it, with sentiments reported to be against his prominent role in governance.
Protests have also emerged at Tesla showrooms nationwide, coinciding with negative public perceptions of Musk’s leadership decisions.
Outlook and Analyst Consensus
As Tesla prepares to announce its first-quarter results on April 22, sentiment among analysts remains mixed but cautiously optimistic. Fellow analyst Dan Ives at Wedbush maintained an Outperform rating with a price target exceeding $500, even in light of Musk’s ongoing political engagements.
In this environment of fluctuating sentiment and market pressures, Morgan Stanley’s bullish outlook on Tesla suggests that while challenges exist, the company’s transformative strategies in AI and robotics may prove to be a game-changer for its future prospects.
For investors seeking insight and analysis on the latest trends affecting stock prices, keep an eye on upcoming earnings reports and market developments that could shape the future trajectory of Tesla and the broader automotive industry.
For more updates and analysis on the financial market, follow us at Smart Money Mindset.
About the Author
Ines Ferré is a senior business reporter at Yahoo Finance. For more insights and strategic reports on market trends, follow her on X at @ines_ferre.
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