Morgan Stanley maintains bullish stance with $410 target
Despite a year-on-year revenue decline and higher operating costs, Tesla (NASDAQ:TSLA) continues to earn Wall Street’s confidence as an AI-driven growth stock. On July 24, Morgan Stanley reaffirmed its “Overweight” rating, keeping its $410 price target unchanged, citing long-term potential in Tesla’s artificial intelligence initiatives.
The electric vehicle pioneer reported second-quarter results that missed both top and bottom line expectations. Automotive revenue fell 16% to $16.7 billion, contributing to a weaker financial performance. Even so, free cash flow came close to breakeven, a sign of operational resilience in a challenging macroeconomic environment.
Analyst trims short-term outlook but remains bullish
Morgan Stanley’s Adam Jonas, a long-time Tesla bull, revised down his earnings per share projection for fiscal year 2025 by 14%. He pointed to declining vehicle deliveries, the elimination of EV incentives, rising tariffs, and significant spending on future projects as reasons for the adjustment. Yet, Jonas emphasized that Tesla is in a transition phase, investing heavily in autonomy, robotics, and AI software—areas that could reshape its margins in the long run.
“Tesla is crossing the chasm to autonomy,” Jonas noted, underlining the company’s leadership in AI-powered vehicle technology. Although immediate profitability may be under pressure, Tesla’s positioning in the AI and mobility space makes it a strategic long-term asset.
AI remains Tesla’s long-term growth engine
Tesla’s integration of AI extends far beyond self-driving cars. The company is expanding into robotics and advanced machine learning applications that fuel its broader clean energy and manufacturing systems. These AI capabilities, coupled with vertical integration and global scale, offer the company a competitive moat in multiple sectors.
However, some analysts suggest that while Tesla is a powerful AI story, other emerging players in the sector may offer more attractive risk-reward profiles, especially amid geopolitical shifts like the return of Trump-era tariffs and U.S. onshoring incentives.
Looking beyond Tesla for AI opportunities
Investors intrigued by Tesla’s AI focus might also explore lesser-known but rapidly scaling companies in the space. Several firms are poised to benefit from structural changes in trade and manufacturing policy, while maintaining leaner operations and greater upside potential.
Still, Tesla remains a dominant force in AI-powered transportation and energy innovation, continuing to capture investor attention as the company bets big on autonomy and next-gen robotics.
