What will matter to Tesla stock price over the next 6 to 12 months?

Investing.com -- Tesla’s latest annual general meeting gave investors more than just the approval of Elon Musk’s $1 trillion compensation package to think about, according to Morgan Stanley. 

Analyst Adam Jonas told investors in a note that while the shareholder vote was the “most important takeaway,” several other developments could “matter to the share price over the next 6 to 12 months.”

One key issue, Morgan Stanley noted, is Tesla’s unresolved investment in xAI. “They’re gonna have to revisit this,” Jonas stated, adding that “Tesla’s relationship with xAI (financially and strategically) is deterministic to the long-term success of Tesla due in part to the natural synergies of data, software, hardware and manufacturing in recursive loops.”

Jonas also pointed to Musk’s comments about Full Self-Driving technology, saying that Musk’s claim that version 14.3 will allow drivers to “text while driving” drew loud applause. 

Morgan Stanley described the moment as significant, adding that “transferring the responsibility for safe operation of a vehicle from human to algorithm represents a ‘steam engine’ moment for transportation.”

Another focal point was said to be Musk’s suggestion that Tesla may need to “build a gigantic chip fab.” 

The bank noted that this move would ensure a “resilient supply and continued innovation” as Tesla seeks to vertically integrate production of the “inference brain” behind its robotics and AI platforms.

Finally, Jonas highlighted Musk’s vision of a “prodigious distributed inference cloud,” where idle Teslas could perform AI workloads. 

The Morgan Stanley analyst believes this could eventually involve “tens of billions of Blackwell-equivalent inference computers at the edge,” forming a global network of “swarming, distributed, low-latency intelligence.”