Morgan Stanley prepared for Tesla price to give up more of prior weeks’ gains

In in the wake of the public disagreement that blew up yesterday between Elon Musk and President Trump, Morgan Stanley has “higher conviction in near-term volatility than near-term direction,” adding that the firm is “prepared for the stock to give up more than just the 4 weeks of performance it has sacrificed so far.” However, the firm reiterates its $410 price target and Overweight rating, underpinned by its continued belief that Tesla’s (TSLA) capabilities in key areas of “physical AI” offer growth and margin opportunities that greatly exceed those of the traditional EV business, which is under pressure. The firm continues to 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,” the analyst added.