Banking giant Morgan Stanley has reiterated its bullish outlook on Tesla (NASDAQ: TSLA), naming it the firm’s top pick in the U.S. auto sector.
The endorsement from analyst Adam Jonas came as he raised Tesla’s price target to $410, implying a potential 35% upside from the last closing price of $302.
Jonas highlighted Tesla’s leadership across key areas such as artificial intelligence, robotics, energy, manufacturing, and large-scale infrastructure.
He emphasized that few companies are as well-positioned as Tesla to scale physical AI applications, given its control over data, fleet operations, and communication systems.
The bullish outlook offers a possible boost for the company, which is currently grappling with rising competition from Chinese automakers, declining sales, and public backlash tied to CEO Elon Musk’s political views.
Notably, fresh data from the Chinese market highlights Tesla’s recent struggles in the market.. In this case, sales of its China-made electric vehicles fell 8.4% year-over-year in July, reversing the modest growth seen in June. The company delivered 67,886 Model 3 and Model Y units last month, including exports, a 5.2% drop from June, according to the China Passenger Car Association.
Tesla stock’s weakest run
Meanwhile, as reported by Finbold, investors should anticipate a challenging period ahead for Tesla stock, as the company enters its historically weakest stretch of the year between August and October.
However, Wall Street sentiment remains broadly positive, with many analysts projecting that TSLA is likely to stay above $300 over the next 12 months.
The optimistic view comes amid the Tesla board’s approval of a new compensation package for Musk under the 2025 CEO Interim Award.
The plan includes a 96 million share restricted stock grant, currently valued at around $30 billion. These shares will vest after two years if Musk remains in service, with a purchase price of $23.34 per share, the same as his 2018 compensation strike price.
At the same time, the vested shares will be locked for five years, and the award includes clawback provisions to prevent overlap with the contested 2018 package. The grant still awaits regulatory approval under the Hart-Scott-Rodino Act.
Featured image via Shutterstock
