A promising rally in the last quarter of 2024 saw Tesla stock (NASDAQ: TSLA) reach a new all-time high (ATH) price of $479.86. Since then, however, a steep correction has occurred.
Chief executive officer (CEO) Elon Musk’s close relationship with President Trump has polarized Tesla’s customer base. The company’s last earnings call saw a double miss — and January marked the first time that vehicle deliveries fell on a year-over-year (YoY) basis. In addition, the business is losing market share in China to domestic competitors.
By press time on March 3, TSLA shares were trading at a price of $298.23, having marked a 26.15% decline since the start of the year.
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In spite of a taut valuation and weakening fundamentals, and as divided as Wall Street analysts are when it comes to Tesla stock, the bulls seem to be turning the tide. Researchers are increasingly confident that the carmaker can secure a leading position in full self-driving (FSD), robotics, and AI. Recently, two eminent Wall Street firms have doubled down on their optimistic outlooks.
Morgan Stanley and Stifel see significant upside in the cards for Tesla stock
On March 3, Morgan Stanley analyst Adam Jones dubbed Tesla stock the firm’s top pick in the U.S. automotive sector. Jones doubled down on an earlier ‘Overweight’ rating, and maintained a $430 price target. The analyst’s forecast implies a 44.18% upside from current prices.
While the researcher did note that Tesla’s delivery numbers have mostly been under expectations, Morgan Stanley does not consider the trend of underperformance to be narrative-changing. In fact, the firm considers this to be emblematic of the fact that the automaker is transitioning from a pure play electric vehicle (EV) business into a more diversified company that will derive growth from emerging technologies such as AI and robotics.
In addition, Jones noted that FY 2025 deliveries could once again mark a YoY decline — but that this would create an attractive entry point. Lastly, the analyst highlighted that Morgan Stanley is confident that Tesla’s total addressable market is set to expand — and that the most bullish turn of events could see the price of Tesla stock rise to as much as $800.
Stephen Gengaro of Stifel echoed many of the same sentiments. The analyst reiterated a ‘Buy’ rating on TSLA shares with a price target of $474, equating to a 59.93% upside. In a note shared with investors, Gengaro cited increasing net favorability ratings and net purchase consideration from Republicans as a counterweight to decreased favorability among Democrats as a balancing factor.
Lastly, the Stifel researcher noted that although Tesla stock will likely remain volatile in the short term, the risks are outweighed by a regulatory path to FSD, owing to Musk’s influence in the White House.
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