Morgan Stanley Bullish on Tesla's AI Potential, Sees "Great Unlock" Ahead
In a recent note, investment bank Morgan Stanley has highlighted Tesla's long-term potential as an AI powerhouse, particularly with the development of Generative AI (Gen AI) and Large Language Models (LLMs). This could be a game-changer for Tesla's value, especially in monetizing its AI capabilities.
The bank pointed to Tesla's upcoming "We, Robot" event on October 10th as a potential catalyst for shifting the narrative around Tesla shares, which are currently trading below their all-time highs. Despite Tesla's stock performance being closely tied to its automotive business, Morgan Stanley sees a bright future as Elon Musk continues to build Tesla's AI and compute infrastructure, including the integration of xAI, his new AI venture.
According to Morgan Stanley, Tesla's stock price could see significant growth driven by various components. The core Tesla Auto business is valued at $59 per share, with expectations of 5.4 million units sold in 2030. The mobility business, including autonomous driving, could contribute $62 per share. The energy business adds $49 per share, while third-party supplier business and insurance contribute $40 and $5 per share, respectively.
However, the biggest growth potential lies in Tesla's network services, which could reach $96 per share by 2030. This is driven by an estimated 14.3 million monthly active users and an average revenue per user (ARPU) of $180.
In conclusion, Morgan Stanley's bullish outlook on Tesla's AI potential and diversified business model could lead to significant long-term growth for the company. Investors should keep an eye on Tesla's upcoming AI developments and how they could impact the company's overall value and stock performance.
