Unfazed by recent headwinds! Morgan Stanley and Goldman Sachs Group, Inc. still bullish on Tesla, Inc. (TSLA.US)

Tesla, Inc. has been facing constant troubles lately! With significant declines in sales in multiple locations, CEO Elon Musk getting involved in political affairs harming the brand image, and top executives cashing out, Tesla, Inc. stock price has dropped nearly 31% so far this year, plummeting over 40% from its peak in December last year. The market is "voting with its feet," expressing concerns about Tesla, Inc.'s future. However, Wall Street giants Morgan Stanley and Goldman Sachs Group, Inc. still remain bullish on Tesla, Inc. Morgan Stanley has reclassified Tesla, Inc. as a "top pick" in America's Car-Mart, Inc. industry, with a target price of $430, indicating over 50% upside from the current stock price; and the bank's target price for Tesla, Inc. in a bullish scenario is as high as $800. Goldman Sachs Group, Inc.'s target price for Tesla, Inc. is $320, implying nearly 15% upside from the current stock price. Morgan Stanley: Tesla, Inc. to benefit from the "physical artificial intelligence" theme In a report released on March 2nd, Morgan Stanley stated that Tesla, Inc.'s car delivery volume for the fiscal year 2025 may decline year-on-year, but this creates an attractive entry point for investors. Morgan Stanley pointed out that Tesla, Inc.'s car delivery volume has been lower than market expectations so far this year, but its market narrative has not changed significantly. The decline in Tesla, Inc.'s car delivery volume indicates that the company is transitioning from being a "pure car company" to a highly diversified artificial intelligence and Siasun Robot & Automation company. Morgan Stanley stated, "As we continue to analyze the overlap of artificial intelligence and Siasun Robot & Automation technology, we increasingly appreciate that business opportunities in non-automotive areas of artificial intelligence may be much larger and adopt faster." The bank said that as artificial intelligence expands into the physical world, Tesla, Inc.'s total addressable market (TAM) is expected to widen further. Although this process may be volatile and nonlinear, the bank believes that 2025 will be a year when investors gradually recognize and reevaluate both existing and emerging "physical artificial intelligence" industries, and Tesla, Inc. has established important competitive advantages in this area. Morgan Stanley believes that the humanoid Siasun Robot & Automation market will receive greater funding support, with Tesla, Inc. positioned at the core of this market. The bank stated that although its base and bullish case analyses do not yet include humanoid Siasun Robot & Automation businesses, the development of this market is already significant enough to impact Tesla, Inc.'s s tock price. According to the bank's calculations, if Tesla, Inc.'s Optimus Siasun Robot & Automation can replace 1% of the U.S. labor market, its valuation could increase by approximately $100 per share. Morgan Stanley believes that Tesla, Inc. is a long-term winner in the autonomous driving/Robotaxi business. The bank expects Tesla, Inc. to launch an "unsupervised" autonomous driving fleet in early 2026, but does not assume widespread adoption of autonomous vehicles before 2030 in its forecast for Tesla, Inc.'s mobility business. Given the current policies, the bank believes that Tesla, Inc. still faces significant challenges in technology, testing, and regulatory approvals. In its bullish case analysis, the development of physical artificial intelligence, rather than the automotive business itself, will be the core driving factor for Tesla, Inc.'s stock price appreciation. In addition to starting to see Tesla, Inc. as a representative of the "physical artificial intelligence" theme, the market's focus on Tesla, Inc.'s energy storage business is also rising. Extreme weather events may prompt investors to focus on companies that can address climate and energy issues. Morgan Stanley believes that the value potential of Tesla, Inc.'s energy storage business may even exceed its automotive business; the gross margin of Tesla, Inc.'s energy storage business is about twice that of its automotive business, and deployment volume is expected to grow by 50% by 2025. Morgan Stanley also points out that Tesla, Inc.'s recurring service revenue is expected to grow with the increase in Tesla, Inc.'s delivered vehicles (with an estimated 23 million vehicles globally in operation by 2030), and the profit margin of its car aftermarket and service business is typically far higher than that of vehicle sales. Furthermore, Morgan Stanley states that technology diffusion (especially the latest advancements in artificial intelligence) is a major driver of reshoring in the U.S. manufacturing industry, and Tesla, Inc. will play a key role in the transformation of the American manufacturing industry in the era of artificial intelligence. Morgan Stanley adds that potential events that could positively catalyze Tesla, Inc.'s stock price include: deploying Robotaxis in the city of Austin, Texas in June; hosting an "Artificial Intelligence Day" event before the end of the year; launching a low-cost model in the second or third quarter of 2025; and releasing Optimus Gen 3 humanoid Siasun Robot & Automation and potentially deploying it within Tesla, Inc.'s factories."Reunin de negocios" - "Business meeting"Goldman Sachs Group, Inc.: Facing Fundamental Challenges in the Short Term, FSD Revenue Growth Will Improve Long-Term Profitability Goldman Sachs Group, Inc. maintains a "neutral" stock rating for Tesla, Inc. Although the 12-month target price has been lowered from $345 to $320, there is still nearly 15% upside potential from the current stock price of Tesla, Inc. The bank believes that Tesla, Inc. will face significant fundamental challenges in the short term, with expectations for the company's earnings per share in 2025 being lower than market consensus, but it is expected that with the increase in FSD software revenue, Tesla, Inc.'s profit growth will improve in the long term - although they have a more balanced view on the monetization potential of Tesla, Inc.'s FSD. In a research report released on March 4th, Goldman Sachs Group, Inc. pointed out that Tesla, Inc. had weak delivery data in January and February, partly due to a redesign of the Model Y and partly due to overall demand being weaker than the bank's previous expectations. The bank also noted that Tesla, Inc. faces fierce competition in the Chinese market. Goldman Sachs Group, Inc. predicts that with the ramp-up of production capacity for the redesigned Model Y, Tesla, Inc.'s delivery performance in March will be stronger. However, overall, Goldman Sachs Group, Inc. currently expects Tesla, Inc.'s first-quarter deliveries in 2025 to be 375,000 vehicles, lower than the previous estimate of 399,000 vehicles, and below the market consensus estimate of 426,000 vehicles. Goldman Sachs Group, Inc. also lowered its delivery expectations for Tesla, Inc. for the years 2025-2027. The bank predicts that Tesla, Inc.'s deliveries in 2025 will be 1.91 million vehicles (7% year-on-year growth), lower than the previous estimate of 1.96 million vehicles (10% year-on-year growth); and predicts deliveries of 2.25 million and 2.5 million vehicles in 2026 and 2027, respectively, lower than the previous estimates of 2.3 million and 2.6 million vehicles. The reduction in delivery forecasts reflects the bank's expectations for a decline in demand for Tesla, Inc.'s existing models, but is partly offset by the bank's more optimistic expectations for the upcoming low-priced new models to be released. The bank also lowered its earnings per share expectations for Tesla, Inc. in 2025/2026/2027, primarily reflecting lower vehicle delivery volumes and a decrease in profit margins for the energy storage business. Goldman Sachs Group, Inc. also discussed Tesla, Inc.'s progress in Full Self-Driving (FSD). The bank believes that FSD v13 has made significant improvements compared to FSD v12, which will help Tesla, Inc. improve its monetization capabilities in the US market in the medium to long term, especially if Tesla, Inc. can achieve the "Eyes Off" level of capability. However, in the Chinese market, several competitors offer hands-free advanced driver assistance systems (ADAS) without the need to purchase additional software packages, indicating that it may be more challenging for Tesla, Inc. to monetize FSD in the Chinese market.