MS analysis: Tesla's future driven by AI more than EVs

Investing.com - A survey conducted by Morgan Stanley on Thursday suggests that investors view artificial intelligence (AI) as a more significant growth driver for Tesla (NASDAQ:TSLA) than electric vehicles (EVs).

The survey, which collected responses from 137 participants over a 24-hour period, revealed that AI was seen as a more influential factor by a 2:1 ratio.

The survey also indicated nearly evenly divided opinions on Tesla's stock performance over the next 12 months. Additionally, the respondents suggested it might be time to consider the implications of Tesla's fourth master plan (MP4), which could assume new significance depending on the outcome of the upcoming US elections.

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However, it's important to note that the survey's respondents, who were selected from Morgan Stanley's distribution list, do not necessarily represent a random sample of investors and may not all be Tesla shareholders.

Morgan Stanley's price target (PT) for Tesla is currently set at $310 per share, which is derived from six components: the core Tesla Auto business, Tesla Mobility, Tesla as a third-party supplier, the Energy division, Insurance, and Network Services.

Analysts cited potential tailwinds that could positively impact Tesla's performance including increased full self-driving (FSD) attach rates, cost milestones on new battery technology, the introduction of new models such as the Cybertruck, multi-van, and Semi, and potential wins in third-party battery technology.

On the other hand, potential risks that could negatively impact the company's performance include increased competition from legacy automakers, Chinese players, and big tech companies, execution risks associated with multiple factory ramps, the market's failure to recognize the potential of Dojo-enabled services, geopolitical risks associated with China, potential dilution, and overall valuation concerns.

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