Morgan Stanley analysts led by Adam Jonas have adjusted their price target for Tesla stock from $400 to $430 per share. The adjustment is primarily due to Tesla's advancements in its autonomous driving program and the robust potential of their mobility fleet, which is projected to grow to 7.5 million vehicles by 2040, generating significant revenue with a high EBITDA margin. Analysts view this growth as transformative in the context of embodied AI advancements and competitiveness in the market.
Jonas emphasized that, 'As interest in AVs continues to rise, we have undertaken the most extensive re-architecture and expansion of our Tesla Mobility (robotaxi) model since initially published in 2015.' This reflects the evolving landscape of autonomous vehicles and the integral role Tesla is expected to play as it develops this technology further.
In our view, Tesla's recent share price appreciation has begun to discount the expanding 'surface area' between Tesla and physical AI, highlighting the company's strategic advantages in data collection and robotics. Investors are increasingly acknowledging the relevance of embodied AI in navigating a complex geopolitical environment, which underscores the relevance of Tesla's innovations.
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