Tesla, Inc. (NASDAQ:TSLA) is one of the Trending AI Stocks on Wall Street. On December 8, Morgan Stanley downgraded the stock to Equal Weight and raised the price target by $15 to $425. The firm holds a neutral stance on the stock due to fair valuation and lack of fresh upside drivers.
“Tesla is a clear global leader in electric vehicles, manufacturing, renewable energy, and real world AI and thus deserving of a premium valuation. However, high expectations on the latter have brought the stock closer to fair valuation.”
Firm analyst Andrew Percoco anticipates a choppy trading environment for Tesla as they see a downside to estimates. Meanwhile, catalysts for its non-auto business appear priced at current levels.
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“We’ve conducted a full re-calibration of our Tesla model, adding in Humanoid valuation supported by our Morgan Stanley Global Humanoid team’s TAM work, expanding our robotaxi model with proprietary market analyses, broadening our Network Services (including FSD) model, moderating our Auto and Energy forecasts, and building an illustrative pay package dilution analysis.”
Percoco said he would “wait for a better entry” for Tesla. He is now Morgan Stanley’s lead analyst for Tesla.
“However, with the stock trading at 30x 2030 EBITDA downside to NTM [next twelve months] cons. estimates, and non-auto catalysts priced, we assume at EW and wait for a better entry.”
Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.
While we acknowledge the potential of TSLA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None.
