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Morgan Stanley & RBC Capital: Bullish on TSLA Stock

Morgan Stanley and RBC Capital Bullish on TSLA Stock.

Last week has been an exciting week for TSLA stock investors, and perhaps the main highlights from it were Elon Musk’s surprise visit to China and the country approving the launch of FSD on its streets, though there’s no information on an exact release date yet. TSLA stock surged as much as 18% thanks to this visit, before it dropped again to around $181 due to news of more layoffs at Tesla (NASDAQ: TSLA), but this wasn’t enough to turn major institutions like Wedbush Securities and Morgan Stanley (NYSE: MS) against the EV giant.

In fact, Morgan Stanley analysts recently released a note that indicated their bullishness on TSLA stock, and they also set a price target with major upside. Additionally, RBC Capital analyst Tom Narayan is also bullish, and he suggests about 60% upside in the stock.

Morgan Stanley Remains Bullish on TSLA Stock

It’s no surprise that Elon Musk’s recent visit to China sparked significant interest and optimism from analysts at Morgan Stanley, who declared “he’s back” in a recent note to clients. The bank said that while the trip was clearly aimed at securing approval for Tesla’s FSD software in China, the implications of it actually run deeper. In fact, Morgan Stanley analysts suggest that Musk’s visit to China is a clear sign of his renewed commitment to Tesla, which is incredible news for investors as many were starting to worry about him getting distracted with his other companies.

Additionally, Musk’s compensation package being rejected by a Delaware judge was seen as a massive setback for Tesla, and now as the company renews the fight to get him the package, Musk is addressing investor concerns by going all in on FSD expansion all around the world. Morgan Stanley believes the symbolism of Musk’s unannounced visit to China resonates strongly, signaling his dedication not just to Tesla but also to his broader ecosystem of companies. Analysts also added that Musk winning the blessing from the Chinese regulators for FSD roll-out in China is the perfect way to address the concerns over Tesla’s performance in the country, as many analysts and investors were worried about how Tesla will manage amid more price wars and aggressive competition from Chinese EV makers.

They also highlighted how Tesla is the perfect example of the convergence of AI and robotics, stating that any advances the company makes when it comes to large language models could benefit both Tesla’s self-driving cars and humanoid robots. While analysts agree that FSD launching in China will benefit Tesla greatly, they still highlighted the potential national security implications of Musk’s dealings in China, given his involvement in missions with SpaceX and various U.S. government agencies. However, they ended the note saying that they’re bullish on Tesla’s technological advancements, maintaining their overweight rating and $310 price target on TSLA stock, and that’s a massive upside of 71% from where the stock is trading now.

Adam Jonas’ FSD Experience

Morgan Stanley’s Managing Director, Adam Jonas, recently shared his own experience when using FSD, and it’s one of the reasons why he sees this upside for TSLA stock. He mentioned that he has been using FSD Version 12.3 heavily over the past few weeks and on April 28th, he used it for more than 70 miles of driving in New York. He said that he had FSD engaged for 90% of the day’s driving and called the system a “pleasure to use” and said that it reduced his overall fatigue level while driving.

Despite this, he believes that Tesla still has a long way to go before the steering wheel is removed from its self-driving cars, implying that he doesn’t really see Robotaxis taking off anytime soon, adding that transparency with the safety data with third party validation will be a critical milestone for advancing deployment. It’s very clear that the majority of Tesla bulls agree on one thing, and that is the fact that FSD is the future. The technology will add a lot to Tesla’s long-term value and Musk knows this very well, which is why he’s seeking to expand with FSD to other countries. It’s important to note that Tesla China said it was “difficult to say” when FSD would be released in China but said it “could launch quickly in the not-too-distant future.”

However, that doesn’t mean all the excitement is over for Tesla China, as there are new reports saying that Tesla’s Robotaxi may first start testing and operating in Hangzhou, which is the capital of China’s Zhejiang province. This is because Hangzhou became the first city in China to use local legislation to clearly define the specific process for operating autonomous vehicles, as well as the first city in China to enact legislation for low-speed autonomous vehicles. Musk basically confirmed that the Robotaxi story will start in China with the unveiling date, as 8/8 is actually a lucky number in China.

Musk talking about the 8/8 choice.

China isn’t the only country FSD is trying to enter. In fact, a recent rumor came out saying that preparations for the introduction of FSD are currently underway in South Korea. The Tesla app software upgrade tab has been changed to FSD driving in the country.

Rumors of FSD launching in South Korea.

Additionally, the same thing with the app happened in Europe in Germany, where Tesla is apparently giving regulators demos of FSD. All of this is more the reason to get excited about TSLA stock and definitely FSD will dominate the entire world in the next few years.

RBC Capital: 60% Upside for TSLA Stock

RBC Capital’s Tom Narayan has a $293 price target on TSLA stock, which is around a 60% upside from where the stock is trading now. Narayan repeated some of Elon Musk’s longtime points about FSD, saying that FSD is five times safer than a regular car, and soon enough, it could eventually become mandated by regulators as a life-saving tool.

In his most recent note to RBC clients, he talked about how some investors were worried about Chinese companies pirating the FSD software, but he brushes these concerns off, saying that FSD is way more than just a software. This is because it includes millions of hours of driving data from autopilot interactions and algorithm training which happens in the United States. Additionally, RBC Capital believes that FSD taking off around the world could happen quicker than Tesla licensing FSD to other automakers, saying that the software accounts for 20% of their Tesla valuation after only assuming 8% market share.

Fully autonomous vehicles are the future of the industry, and Tesla is the only EV company that could really scale this technology and make it suitable for worldwide expansion and licensing deals. FSD will be everywhere in Tesla, from its cars and Robotaxis to even its humanoid robots, so Musk betting everything on it should be a bullish sign for Tesla investors. That’s why now might be the perfect time for investors who are interested in TSLA stock to load up on more shares, because at its current price, and with analysts upgrading TSLA stock each day, the stock looks cheap.


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