Tesla On Track For 50% Stock Jump Thanks To AI And Robotics, Says Top Wall Street Analyst: 'Humanoid Robot Serious Enough To Move The Stock'

Morgan Stanley has reinstated Elon Musk‘s Tesla Inc. TSLA as its top U.S. auto pick, citing the company’s focus on artificial intelligence and robotics, in a note on Sunday.

What Happened: The endorsement comes despite Tesla’s recent challenges, including a 45% drop in European sales in January and a decline in 2024 annual deliveries. Analyst Adam Jonas highlighted the company’s shift from a “pure automotive play” to a diversified focus on AI and robotics.

Jonas reiterated his $430 price target for Tesla, making it one of the highest on Wall Street, implying nearly a 51% upside to the stock’s closing price on Monday. This aligns with CEO Elon Musk’s strategy of pivoting the company towards AI and robotaxis.

In the research note, Jonas stated that the market potential for non-automotive applications of embodied AI is significantly larger and will be adopted more rapidly than autonomous vehicles.

“Humanoid robot opportunity is not in our base or bull case but is becoming serious enough to move the stock. On our calculations, every 1% of U.S. labor force that can be captured by Tesla Optimus is worth approximately $100/TSLA share,” explained Jonas.

Jonas is also well aware of Tesla’s challenges as an EV manufacturer. He cautioned in the note, “EV ‘winter may be prolonged and could still require further steps to mitigate further potential losses near term.” While Musk expects sales to increase with the introduction of more affordable models, Jonas suggests that deliveries could decrease in 2025, offering an “attractive entry point” for investors.

SEE ALSO: DeepSeek Loses Top Spot As Tencent’s Yuanbao AI Becomes The Top iPhone App In China Amid Intensifying AI Battle

Why It Matters: Despite these optimistic projections, Tesla’s stock has underperformed the broader U.S. market, declining nearly 25% year-to-date. The stock fell nearly 40% from its December peak, erasing almost $137 billion from CEO Elon Musk’s wealth. This drop was largely due to a nearly 50% decline in European sales in January, amid potential tariffs and ongoing Musk’s political involvement in the federal cost-cutting efforts.

Meanwhile, Tesla Chair Robyn Denholm on Monday sold nearly $33.7 million worth of the company’s stock, as part of a previously adopted trading plan. This sale followed a trend among Tesla insiders offloading shares as the company navigates macroeconomic uncertainties and intensifying competition in the EV market.

• READ MORE: Polestar Vs. Tesla: Can Smaller EV Company Disrupt Giant Facing Boycotts, Protests With ‘Trade In’ Offer?

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.