Investor's Corner
Tesla stock: Morgan Stanley pumps the brakes and lowers PT ahead of earnings
Analysts at Morgan Stanley pumped the brakes on Tesla stock by lowering its price target ahead of the automaker’s Earnings Call late this week.
Tesla shares are down 15 percent so far this year. Over the past year, shares are up 66 percent, but moving into 2024, some bulls are remaining cautious.
Morgan Stanley is one of them. In a note to investors released on Monday, analysts at the firm noted there are several factors that could spell trouble for global demand, including increased competition, pricing instability, and slowing demand for EVs.
Tesla will report Earnings on Wednesday. The company reached its 1.8 million unit delivery goal in 2023. It also dominated EV deliveries in the United States and Europe and was toward the top of the list in China. It launched the Cybertruck, a new Model 3 design, and has plenty of other catalysts moving into 2024. However, an ever-changing landscape, more competition, and other factors have Morgan Stanley proceeding with increased caution for the year.
In a note from analysts at the firm, they wrote about the potential risks for the stock this year:
“Global EV momentum is stalling. The market is over-supplied vs. demand. We anticipate Tesla’s 2024 outlook to be cautious on volume and profitability…Tough sledding for EVs but we remain OW on AI and robotics optionality.”
Adam Jonas listed several risk factors for the stock in the note, which include price cuts, weakening or expiration of EV incentives, excess capacity in China, residual value risks, and fleets cutting EV concentration.
Price Cuts
Tesla is still working on pricing stability, which improved greatly throughout 2023 but still offered some concern for investors. Less expensive EVs equate to increased adoption, but it also puts pressure on margins and profitability for the company.
Tesla has already cut prices in China and Europe this year, which is concerning from Morgan Stanley’s standpoint:
“Tesla has already announced price cuts in China and Europe that matched or exceeded our prior expectations of price reductions for the full year 2024. The German Tesla price cuts came merely days after Tesla announced production cuts at Giga Berlin related to Red Sea shipping issues. Lower production is usually positive for prices. This suggests the European EV situation is changing quite rapidly.”
Expiration/Weakening of EV Incentives
In the U.S. especially, Tesla is adjusting the narratives that surround some of its vehicles and their eligibility for EV tax credits. Two Model 3 configurations lost the tax credit, and as it is one of the best-selling EVs in Tesla’s lineup, it is not a positive, although the car is still affordable.
Morgan Stanley is also skeptical about the future of the IRA, stating it looks to be “increasingly uncertain.”
Some consumers are in need of these incentives to purchase the vehicle, and even if they are not a necessity, they are a benefit. It could sway many consumers in the direction of other vehicles. It is important to note that Volkswagen, BMW, Audi, and Ford also lost tax credit eligibility on some of their EVs.
Excess Capacity in China
Morgan Stanley said its Chinese team noted sales cannibalization, increased battery capacity and inventory, and the expiration of “certain local stimulus measures” as reasons Tesla may feel the heat.
Residual Value Risks
Price cuts from OEMs have pressured EV residuals, and dealerships are less bullish on electric cars than ever. Jonas writes that residual value volatility “hurts the value proposition for consumers and creates uncertainty around leasing partners who don’t want to hold this risk.” This includes Tesla.
Tesla’s leasing penetration is in the low single digits globally, Morgan Stanley notes.
Fleets Cutting EVs
Hertz made a drastic announcement earlier this month, stating it would backtrack its massive commitment to EVs as it did not properly account for the cost of damages. One-third of its EV fleet is being sold off, and a portion of the proceeds will go back into combustion engine vehicles.
Other companies are doing this as well on a smaller scale. Fleets offer a few advantages, including a large boost to orders for EV makers. Hertz planned to buy 100,000 Teslas, for example.
They also give drivers an opportunity to drive EVs before buying. While this will still be available, it will be less widespread.
Price Target Downgrade
Morgan Stanley moved its price target to $345 from $380.
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Investor's Corner
Tesla gets tip of the hat from major Wall Street firm on self-driving prowess
“Tesla is at the forefront of autonomous driving, supported by a camera-only approach that is technically harder but much cheaper than the multi-sensor systems widely used in the industry. This strategy should allow Tesla to scale more profitably compared to Robotaxi competitors, helped by a growing data engine from its existing fleet,” BoA wrote.
Tesla received a tip of the hat from major Wall Street firm Bank of America on Wednesday, as it reinitiated coverage on Tesla shares with a bullish stance that comes with a ‘Buy’ rating and a $460 price target.
In a new note that marks a sharp reversal from its neutral position earlier in 2025, the bank declared Tesla’s Full Self-Driving (FSD) technology the “leading consumer autonomy solution.”
Analysts highlighted Tesla’s camera-only architecture, known as Tesla Vision, as a strategic masterstroke. While technically more challenging than the multi-sensor setups favored by rivals, the vision-based approach is dramatically cheaper to produce and maintain.
This cost edge, combined with Tesla’s rapidly expanding real-world data engine, positions the company to scale robotaxis far more profitably than competitors, BofA argues in the new note:
“Tesla is at the forefront of autonomous driving, supported by a camera-only approach that is technically harder but much cheaper than the multi-sensor systems widely used in the industry. This strategy should allow Tesla to scale more profitably compared to Robotaxi competitors, helped by a growing data engine from its existing fleet.”
The bank now attributes roughly 52% of Tesla’s total valuation to its Robotaxi ambitions. It also flagged meaningful upside from the Optimus humanoid robot program and the fast-growing energy storage business, suggesting the auto segment’s recent headwinds, including expired incentives, are being eclipsed by these higher-margin opportunities.
Tesla’s own data underscores exactly why Wall Street is waking up to FSD’s potential. According to Tesla’s official safety reporting page, the FSD Supervised fleet has now surpassed 8.4 billion cumulative miles driven.
Tesla FSD (Supervised) fleet passes 8.4 billion cumulative miles
That total ballooned from just 6 million miles in 2021 to 80 million in 2022, 670 million in 2023, 2.25 billion in 2024, and a staggering 4.25 billion in 2025 alone. In the first 50 days of 2026, owners added another 1 billion miles — averaging more than 20 million miles per day.
This avalanche of real-world, camera-captured footage, much of it on complex city streets, gives Tesla an unmatched training dataset. Every mile feeds its neural networks, accelerating improvement cycles that lidar-dependent rivals simply cannot match at scale.
Tesla owners themselves will tell you the suite gets better with every release, bringing new features and improvements to its self-driving project.
The $460 target implies roughly 15 percent upside from recent trading levels around $400. While regulatory and safety hurdles remain, BofA’s endorsement signals growing institutional conviction that Tesla’s data advantage is not hype; it’s a tangible moat already delivering billions of miles of proof.
Elon Musk
SpaceX IPO could push Elon Musk’s net worth past $1 trillion: Polymarket
The estimates were shared by the official Polymarket Money account on social media platform X.
Recent projections have outlined how a potential $1.75 trillion SpaceX IPO could generate historic returns for early investors. The projections suggest the offering would not only become the largest IPO in history but could also result in unprecedented windfalls for some of the company’s key investors.
The estimates were shared by the official Polymarket Money account on social media platform X.
As noted in a Polymarket Money analysis, Elon Musk invested $100 million into SpaceX in 2002 and currently owns approximately 42% of the company. At a $1.75 trillion valuation following SpaceX’s potential $1.75 trillion IPO, that stake would be worth roughly $735 billion.
Such a figure would dramatically expand Musk’s net worth. When combined with his holdings in Tesla Inc. and other ventures, a public debut at that level could position him as the world’s first trillionaire, depending on market conditions at the time of listing.
The Bloomberg Billionaires Index currently lists Elon Musk with a net worth of $666 billion, though a notable portion of this is tied to his TSLA stock. Tesla currently holds a market cap of $1.51 trillion, and Elon Musk’s currently holds about 13% to 15% of the company’s outstanding common stock.
Founders Fund, co-founded by Peter Thiel, invested $20 million in SpaceX in 2008. Polymarket Money estimates the firm owns between 1.5% and 3% of the private space company. At a $1.75 trillion valuation, that range would translate to approximately $26.25 billion to $52.5 billion in value.
That return would represent one of the most significant venture capital outcomes in modern Silicon Valley history, with a growth of 131,150% to 262,400%.
Alphabet Inc., Google’s parent company, invested $900 million into SpaceX in 2015 and is estimated to hold between 6% and 7% of the private space firm. At the projected IPO valuation, that stake could be worth between $105 billion and $122.5 billion. That’s a growth of 11,566% to 14,455%.
Other major backers highlighted in the post include Fidelity Investments, Baillie Gifford, Valor Equity Partners, Bank of America, and Andreessen Horowitz, each potentially sitting on multibillion-dollar gains.
Elon Musk
Elon Musk hints Tesla investors will be rewarded heavily
“Hold onto your Tesla stock. It’s going to be worth a lot, I think. That’s my bet,” Musk said.
Elon Musk recently hinted that he believes Tesla investors will be rewarded heavily if they continue to hold onto their shares, and he reiterated that in a new interview that the company released on its social accounts this week.
Musk is one of the most successful CEOs in the modern era and has mammothed competitors on the Forbes Net Worth List over the past year as his holdings in his various companies have continued to swell.
Tesla investors, especially those who have been holding shares for several years, have also felt substantial gains in their portfolios. Over the past five years, the stock is up over 78 percent. Since February 2019, nearly seven years ago to the day, the stock is up over 1,800 percent.
Musk said in the interview:
“Hold onto your Tesla stock. It’s going to be worth a lot, I think. That’s my bet.”
Elon Musk in new interview: “Hold on to your $TSLA stock. It’s going to be worth a lot, I think. That’s my bet.” pic.twitter.com/cucirBuhq0
— Sawyer Merritt (@SawyerMerritt) February 26, 2026
It’s no secret Musk has been extremely bullish on his own companies, but Tesla in particular, because it is publicly traded.
However, the company has so many amazing projects that have an opportunity to revolutionize their respective industries. There is certainly a path to major growth on Wall Street for Tesla through its various future projects, including Optimus, Cybercab, Semi, and Unsupervised FSD.
- Optimus (Tesla’s humanoid robot): Musk has discussed its potential for tasks like childcare, walking dogs, or assisting elderly parents, positioning it as a massive long-term driver of company value.
- Cybercab (Tesla’s robotaxi/autonomous ride-hailing vehicle): a fully autonomous vehicle geared specifically for Tesla’s ride-sharing ambitions.
- Semi (Tesla’s electric truck, with mentions of expansion, like in Europe): brings Tesla into the commercial logistics sector.
- Unsupervised FSD (Full Self-Driving software achieving full autonomy without human supervision): turns every Tesla owner’s vehicle into a fully-autonomous vehicle upon release
These projects specifically are some of the highest-growth pillars Tesla has ever attempted to develop, especially in Musk’s eyes, as he has said Optimus will be the best-selling product of all-time.
Many analysts agree, but the bullish ones, like Cathie Wood of ARK Invest, are perhaps the one who believes Tesla has incredible potential on Wall Street, predicting a $2,600 price target for 2030, but this is not even including Optimus.
She told Bloomberg last March that she believes that the project will present a potential additive if Tesla can scale faster than anticipated.
Tesla wins another award critics will absolutely despise
Tesla Full Self-Driving likely to expand to yet another Asian country
