Tesla (NASDAQ:TSLA) elicits a wide range of opinions even during calmer times, and the current period is anything but calm. The stock is down over 50% from its peak in December, including a 5% drop today. So, whatever your opinion of the EV leader, it’s likely amplified right now.
Morgan Stanley analyst Adam Jonas puts it into perspective: the recent market turmoil has sparked “deeper questions” among investors regarding the health of the US economy, the value of emerging AI technologies, and the shifting dynamics of global power. And within his coverage, he says, “No other stock is so clearly identified with the volatile debate around trade and politics as Tesla.”
No matter what policies are taken in the short term, Jonas thinks Embodied AI will continue to make inroads, leading to more advanced robots that can move through and interact with the physical world, all “powered by agentic software foundation models.” Over the next 10 to 20 years, Jonas believes the spread of humanoid robots could reshape how we think about production and the economy. If machines can build other machines with little human help, it could change how we measure things like dependency ratios, when people retire, and GDP per capita.
The fast progress being made in autonomous systems, says Jonas, is drawing interest from public investors, venture capitalists, and national security sectors. “Specifically,” he goes on to add, “defense-tech/manufacturing is beginning to drive a greater appreciation of the dual-use of autonomy with investors. Tesla’s ultimate role within national security/government end markets (either directly or indirectly) is still evolving.”
Over time, though, the core technologies, systems, and supply chains developed by Tesla are likely to extend beyond just consumer markets. “We believe 2025 may include milestones that will be relevant to this debate,” Jonas further said on the matter.
The analyst still believes that Tesla’s strengths in critical areas of physical AI – such as autonomous vehicles, humanoid robots, and other advanced systems – along with its capabilities in areas such as data, robotics, energy storage, and manufacturing, present significant growth and margin opportunities that far surpass those of its traditional EV business, which is currently under pressure.
“Put another way,” Jonas summed up, “we believe the challenges facing Tesla’s current business are widely reported and well known, while the opportunities in the future business are potentially greatly underestimated.”
To this end, Jonas assigns an Overweight (i.e., Buy) rating for Tesla shares, along with a $410 price target. If met, the figure could yield returns of ~85% over the one-year timeframe. (To watch Jonas’ track record, click here)
15 other analysts are also in the bull camp. However, with 11 others sitting on the fence and another 11 leaning bearish, the consensus view lands at a cautious Hold (i.e. Neutral). The average price target of $302.31 still implies a 36% upside from current levels. (See TSLA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.