Tesla stock gains as Morgan Stanley reiterates Overweight rating

Investing.com - Morgan Stanley (NYSE:MS) has reiterated an Overweight rating and $410.00 price target on Tesla (NASDAQ:TSLA) stock, currently trading at $319.16 with a market capitalization of $1.03 trillion. According to InvestingPro data, the stock trades at a P/E ratio of 173.86, suggesting premium valuation levels as the firm emphasizes the economic potential of robotics and autonomous technology.

The investment bank highlighted the convergence of AI research and manufacturing, suggesting this combination will drive significant technological advancement. Morgan Stanley specifically pointed to the economic advantages of humanoid robots, estimating that one robot operating at $5 per hour could replace two humans working at $25 per hour, generating a net present value of approximately $200,000 per humanoid. Tesla’s strong financial position, with more cash than debt on its balance sheet and a current ratio of 2.04, positions it well for such technological investments.

The firm also noted the cost efficiency of autonomous vehicles, projecting that a "robot shaped car" could potentially reduce ride-sharing costs to less than $0.20 per mile, approximately one-tenth the cost of human-driven alternatives. Additionally, Morgan Stanley stated that an autonomous electric vertical takeoff and landing (eVTOL) aircraft could generate revenue equivalent to 15 ride-share vehicles.

Morgan Stanley compared current hesitancy about autonomous vehicles to historical skepticism toward revolutionary technologies like airplanes, suggesting that widespread adoption of AI-enabled machines will ultimately be determined by economics and safety considerations.

The investment bank’s analysis extends to personal robotics, predicting that the marginal cost of personal robots should eventually approach the marginal cost of power, emphasizing the relationship between computing power (GPUs) and energy requirements (BTUs).

In other recent news, Tesla’s sales in Germany experienced a significant decline in July, with a 55.1% drop compared to the same month last year, selling just 1,110 cars. Over the January to July period, Tesla’s total sales in Germany decreased by 57.8% compared to the same period in 2024. Despite these challenges, Morgan Stanley has reiterated its Overweight rating on Tesla, maintaining a price target of $410.00. The investment firm continues to hold a positive outlook on Tesla, even as it notes a decline in brand appeal among its summer intern class.

Meanwhile, Nvidia (NASDAQ:NVDA) saw a shift in retail investor behavior, as data from Charles Schwab (NYSE:SCHW) indicated that investors turned to buying Nvidia shares in July after selling them in June. This change in investment strategy made Nvidia the top buy among clients tracked by Schwab’s Trading Activity Index. The STAX index rose for the second consecutive month, although it remains low in its historical range. These developments highlight the varying investor sentiment and market dynamics surrounding Tesla and Nvidia.

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