As the U.S. potentially heads into a "Trump 2.0" era, Tesla (TSLA, Financial) has gained significant attention, with Morgan Stanley predicting the stock could soar to $500. Despite a recent 6.15% drop, analysts remain optimistic about Tesla's prospects. The stock has risen 32.23% this year, and Morgan Stanley forecasts a potential 52.2% increase from its current level.
Analysts led by Adam Jonas believe that Tesla's expansion beyond electric vehicles (EVs), coupled with Elon Musk's growing political influence, could further boost its stock price. Currently, 80% of Tesla's revenue comes from EV sales, often excluding it from the excitement around AI, data centers, and renewable energy. However, Tesla's energy business has seen significant growth, with energy storage deployments up 125% over the past year, and Morgan Stanley expects this trend to continue.
Morgan Stanley highlights that Tesla's energy segment, including solar and storage, boasts almost double the gross margin of its EV business. Additionally, the firm's advancements in autonomous driving could position it as a key AI player, potentially transforming Tesla into an AI giant. Tesla's ability to integrate data, robotics, energy, AI, manufacturing, and infrastructure is seen as a unique advantage.
Furthermore, Elon Musk is expected to exert greater political influence in the coming years, with investors betting on his relationship with President Trump to benefit Tesla. Musk has made significant financial contributions to Trump and other Republican candidates, reinforcing his political ties.
