Morgan Stanley's longtime Tesla analyst to company's investors: Weak near-term expectations from Tesla stock do not mean are there is No ...

Morgan Stanley analyst Adam Jonas has good news for Tesla investors. In a note, Jonas has predicted that Tesla stock will rebound over 90% within the next year. The Morgan Stanley analyst and long-standing Tesla enthusiast, forecasts a significant recovery for Tesla's stock, projecting a potential increase. Despite recently lowering his price target and sales expectations due to intensifying competition, an aging product lineup, and a "Buyers' strike" stemming from negative brand perception, Jonas maintains his overweight rating and considers Tesla a top investment choice.

Tesla's stock has fallen 50% from its peak in December 2024, but the Morgan Stanley team has set a $430 price target, suggesting a 93% rebound from its current price of $223.59.

Jonas views the current dip as an attractive entry point for investors, describing Tesla as an "embodied [artificial intelligence] compounder" in a recent note. While acknowledging short-term challenges such as declining sales, waning brand sentiment, and a market "de-grossing," he argues that these issues do not fundamentally alter Tesla's long-term narrative, which hinges on advancements in robotics and AI. He notes that media attention has shifted toward Elon Musk's political endeavors, overshadowing Tesla's AI initiatives and reshaping its public image.
Jonas outlines a range of possibilities for Tesla's stock, with a bear case of $200 and a bull case of $800 within the next 12 months. He identifies potential catalysts for a stock resurgence, including the rollout of Tesla's Full Self-Driving (FSD) Unsupervised for paid rideshare services in Texas later this year. Although the Tesla Cybercab remains a longer-term prospect, Jonas believes that FSD Unsupervised rides in Model 3 or Model Y vehicles could highlight the promise of Tesla's robotaxi ambitions.

Adding to the optimism, billionaire investor Ron Baron has reaffirmed his staunch support for Elon Musk and Tesla, undeterred by recent criticism of Musk's political activities. Despite near-term hurdles, Jonas remains confident that Tesla's focus on transformative technologies will drive its stock upward.