Investor's Corner
Tesla’s $10 ‘bear case’ from Morgan Stanley highlights the noise surrounding TSLA
Tesla stock (NASDAQ:TSLA) looked alarming right before the markets opened on Tuesday amidst news that Morgan Stanley analyst Adam Jonas had lowered the electric car maker’s “bear case outcome” to just $10 per share, a steep drop from his initial worst-case scenario estimate of $97 per share. The analyst’s findings dealt a blow to Tesla stock during pre-market trading, pushing shares down by over 3% at one point.
The Morgan Stanley analyst’s worst-case estimate was driven in part by concerns about Tesla’s business in China, which would likely be adversely affected by the ongoing trade war between the country and the United States. According to Jonas, Tesla could generate about $9 billion in revenues in China between 2020 and 2024, but if Beijing targets the company with reprisal tariffs and restrictions, that figure could be halved, resulting in more than $16 billion of the electric car maker’s market value getting wiped out.
“Our revised case assumes Tesla misses our current Chinese volume forecast by roughly half, to account for the highly volatile trade situation in the region, particularly around areas of technology, which we believe run a high and increasing risk of government/regulatory attention. We believe as Tesla’s share price declines, the likelihood of the company potentially seeking alternatives from strategic/industrial/financial partners rises,” Jonas noted.

The analyst’s radical $10 estimate for Tesla unsurprisingly attracted a lot of attention, and it did not take long before news of Morgan Stanley’s updated views made the rounds online. What was not reported as much was that Adam Jonas kept his $230 price target on TSLA stock, as well as his equal-weight rating for the company under the firm’s best-case scenario. Also left out in a number of reports was Morgan Stanley’s best-case price target of $391, which is actually pretty optimistic considering the recent movements of Tesla stock.
Other personalities in the financial world eventually gave their take on Jonas’ worst-case scenario for Tesla. Jim Cramer, who has traded barbs with Elon Musk in the past, described the $10 estimate as “insane” and a simple gimmick. “Setting a price target of $10 on a $200 stock really is insane. How about $8? How about $12? Ten basically says, ‘I want to get talked about. Let’s talk about me,’” Cramer said, adding that “if he had done $47 would we have talked about him? No, but 10. Ten is right in your face. I question this piece of research.”
Cathie Wood of ARK Invest, who still maintains a positive stance on the company, also questioned the Morgan Stanley analyst’s findings. “Also interesting to note, Jonas cut his worst-case price by more than 90% but left his price target unchanged at $230. So, I guess he is suggesting that the probability of the bear case has dropped significantly, and/ or the probability of the bull case has increased,” Wood wrote on Twitter.

Considering the pervading negativity surrounding Tesla’s narrative today, it is unsurprising to see aspects of Morgan Stanley’s recent note getting misinterpreted. A look at social media platforms such as Twitter, for example, would reveal some Tesla critics stating that the $10 worst-case estimate was Morgan Stanley’s new price target for TSLA stock. This is untrue, but these instances all but highlight how easy it is for misconceptions about the electric car maker could spread.
This pervading negativity is seen in the mainstream coverage of the company. On Monday, Dan Ives from Wedbush Securities cut his price target and penned a scathing note to Tesla, even describing Elon Musk’s initiatives such as Full Self-Driving and the Robotaxi network as “sci-fi projects.” Ives’ statements on Monday garnered widespread attention, significantly more than his comments on Tuesday, when he explained that he does not think Tesla will eventually file for bankruptcy. Ives also noted on Tuesday that Tesla could return to profitability in the future, provided that demand is sustained and costs are cut.
At this point, it appears that the time is right for Tesla to adopt a more assertive PR strategy that is ready to debunk misinformation and clarify misconceptions at a moment’s notice. By doing so, Tesla can lay out its case clearly, providing explanations as necessary and leaving little to speculation. This would require constant vigilance on the part of the electric car maker, but it would help, at least by straightening out the facts of a story. These initiatives, coupled with an aggressive information campaign that dispels misconceptions about the company and its vehicles, could ultimately allow Tesla to change the course of its narrative for the better.
As of writing, Tesla stock is trading -0.29% at $204.76 per share.
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
Investor's Corner
Tesla analysts are expecting big things from the stock
Tesla analysts are expecting big things from the stock (NASDAQ: TSLA) after many firms made price target adjustments following the Q3 Earnings Call.
Last Wednesday, Tesla reported earnings with record revenue but missed EPS estimates.
It blew delivery expectations out of the water with its strongest quarter in company history, but Tesla’s future relies on the development of autonomous vehicles, robotics, and AI, which many bullish firms highlight as major strengths.
The earnings call reiterated those points, along with the belief that Tesla CEO Elon Musk should be rewarded with a newly proposed pay package that would enable him to gain $1 trillion in wealth if he comes through on a lengthy list of performance tranches.
Nine Wall Street firms made adjustments to their outlook on Tesla shares in the form of price target increases since last Wednesday’s call, all of which are indications of big expectations for the stock moving forward.
Here are the nine firms that made moves:
- Truist – $280 to $406, reiterated Hold rating
- Roth MKM – $395 to $404, reiterated Buy rating
- Cantor Fitzgerald – $355 to $510, reiterated Overweight rating
- Deutsche Bank – $435 to $440, reiterated Buy rating
- Mizhuo – $450 to $485, reiterated Outperform rating
- New Street Research – $465 to $520, reiterated Buy rating
- Evercore ISI – $235 to $300, reiterated In Line rating
- Freedom Capital Markets – $338 to $406, upgraded to Hold rating
- China Renaissance – $349 to $380, reiterated Hold rating
The boosts in price target are largely due to Tesla’s future projects, as Roth MKM, Cantor Fitzgerald, Mizuho, New Street Research, and Evercore ISI all explicitly mention Tesla’s autonomy, robotics, and AI potential as the main factors for its price target boosts.
Cantor Fitzgerald raises Tesla PT To $510, citing Cybercab, Semi, and AI momentum
It is no surprise that many firms are adjusting their outlook on Tesla shares considerably in an effort to prepare for the company’s transition to even more of a tech company than a car company.
The issue with many analysts is that they treat the company’s vehicle deliveries as the main indicator of value.
However, Tesla has a robust energy division, which was a major contributor to the company’s strong margins and gross profit in Q3, as well as its prowess in robotics and AI.
Additionally, the company is seen as a key player in the autonomy field, especially after launching driverless rides on a Robotaxi platform in Austin and expanding a similar program in the Bay Area.
Tesla shares were up over 5 percent at 12:18 p.m. on the East Coast.
Investor's Corner
Tesla warns Elon Musk could step down if shareholders reject pay plan
Denholm’s letter emphasized Tesla is at a “critical inflection point” as it scales AI-driven projects such as Full Self-Driving (FSD) and Optimus.
Tesla Board Chair Robyn Denholm has urged shareholders to approve CEO Elon Musk’s new 2025 Performance Award ahead of the November 6 Annual Meeting, warning that rejecting it could risk losing his leadership.
In a letter posted on Tesla’s official handle on X, Denholm stated that the company must “foster an environment that motivates Elon to achieve great things,” or risk losing “his time, talent, and vision,” which she described as essential to Tesla’s success.
Retaining Musk amid Tesla’s critical transition
Denholm’s letter emphasized Tesla is at a “critical inflection point” as it scales AI-driven projects such as Full Self-Driving (FSD) and Optimus. She argued that Musk’s leadership remains vital as Tesla pushes toward becoming “the leading provider of autonomous solutions and the most valuable company in the world.” Without a new performance-based plan, Denholm warned, Musk could step away, potentially costing Tesla significant long-term value.
“If we fail to foster an environment that motivates Elon to achieve great things through an equitable pay-for-performance plan, we run the risk that he gives up his executive position, and Tesla may lose his time, talent, and vision, which have been essential to delivering extraordinary shareholder returns,” the Tesla Board Chair stated.
The board’s proposed 2025 Performance Award aligns Musk’s compensation with ambitious targets while extending his commitment for at least 7.5 more years. Denholm stated that the vote is a defining moment for Tesla’s future direction, adding that the plan was designed to keep Musk focused on innovation while maintaining governance discipline. “A vote here is both an endorsement of Elon’s vision and a vote for Tesla’s carefully tailored strategy,” she said.
Musk’s pay history is rooted in performance
Elon Musk’s pay history with Tesla has long been unconventional. For years, he has declined a regular salary, instead directly tying his earnings to Tesla’s ability to meet ambitious production and market-value goals. His 2018 performance award, approved by shareholders at a time when Tesla had a market cap of just about $59 billion, granted him stock options only when Tesla reached aggressive growth milestones, such as growing the company’s market cap to $650 billion.
At the time, the milestones included $50 billion additions to Tesla’s market cap, which were considered by many to be unrealistic. Those goals were ultimately met by the electric vehicle maker, but a Delaware court later rescinded the plan in January 2024, calling it an “unfathomable sum.”
Tesla shareholders reaffirmed support for Musk’s pay in 2024, even as legal disputes continued. The board then issued an interim equity package valued around $29 billion while developing a new long-term plan earlier this year. Since then, Tesla’s Board has proposed Musk’s 2025 CEO Performance Award, which could be worth nearly $1 trillion, but only if Musk were to grow Tesla into the world’s most valuable company with a market cap of $8.5 trillion, among other aggressive and ambitious targets.
Investor's Corner
Cantor Fitzgerald raises Tesla PT To $510, citing Cybercab, Semi, and AI momentum
The firm cited upcoming production milestones for the Cybercab, Semi, and Optimus as key drivers behind its revised valuation.
Cantor Fitzgerald has boosted its Tesla (NASDAQ:TSLA) price target from $355 to $510 per share, maintaining an “Overweight” rating over its continued confidence in the company’s long-term growth.
Analyst Andres Sheppard cited upcoming production milestones for the Cybercab, Semi, and Optimus as key drivers behind Cantor Fitzgerald’s revised valuation, as well as expanding opportunities in Tesla’s Energy and Full Self-Driving initiatives.
Major growth from multiple Tesla programs
According to Sheppard, Tesla disclosed that volume production for the Cybercab, Semi, and Megapack 3 is on track for fiscal year 2026, with Optimus production lines also targeted to launch next year. The analyst highlighted these updates as “significant,” noting that Tesla’s diverse roadmap continues to reinforce its position as a vertically integrated energy and AI company.
Cantor Fitzgerald now expects Tesla’s capital expenditures at approximately $9.2 billion for FY2025 and around $12 billion for FY 2026, a substantial increase tied to the company’s efforts to further scale its operations. The analyst noted that these investments align with Tesla’s push into robotics, autonomous driving, and energy storage.
Confidence in AI-driven expansion
Tesla shares closed at $433.72 last Friday, giving Cantor Fitzgerald’s $510 price target an implied upside of roughly 17.6%. The revised forecast reflects the firm’s expectation that Tesla’s long-term value extends far beyond vehicle sales, with strong upside from the company’s FSD, Robotaxi/Cybercab, Semi, and Optimus initiatives, as noted in a StreetInsider report.
“Overall, we remain bullish on TSLA over the medium to long term,” Sheppard wrote. “We continue to see meaningful future upside from Energy Storage & Deployment, FSD, Robotaxis/Cybercab, Semis, and Optimus Bots.”
Tesla highlighted these key initiatives in its Q3 2025 Update Letter. “We continue to evolve and augment our product lineup with a focus on cost, scale and future monetization opportunities via services powered by our AI software. Cybercab, Tesla Semi and Megapack 3 are on schedule for volume production starting in 2026,” the company wrote.
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