Car delivery is the foundation, physical AI is the bull market engine! Tesla, Inc. (TSLA.US) performance is coming, Morgan Stanley is closely focused on Robotaxi, Optimus Prime, and energy storage "three arrows in a row"

In recent days, the Korean stock market, known as the "AI computing power barometer," has frequently experienced circuit breakers due to sharp rises and falls, compounded by the overcrowding and highly leveraged long positions in global AI computing power theme stocks and semiconductor sectors. This has led to extreme and intense selling. Wall Street financial giant Morgan Stanley has taken a cautious stance on the valuation prospects and target stock price expectations for the leader in the fields of electric vehicles, AI, autonomous driving, and Siasun Robot & Automation, Tesla, Inc. (TSLA.US). The senior analyst team led by Morgan Stanley's Andrew Percoco stated that they have slightly raised the target price of Tesla, Inc. from $415 to $417 and continue to give an "Equal-weight" rating. In comparison, Tesla, Inc. closed at $391.06 on Thursday. Morgan Stanley's valuation framework shows that the electric vehicle business contributes only $47 to the target price, while the Robotaxi, network services, and humanoid Siasun Robot & Automation combined contribute $330. Recent deliveries of 480,100 vehicles and deployment of 13.5GWh of energy storage systems (which may be closely related to AI data centers) have strengthened Tesla, Inc.'s fundamental AI infrastructure. However, the pressure of whether the market's extremely optimistic valuation of Tesla, Inc. closely tied to its exclusive AI computing power infrastructure cluster and AI applications and physical AI system can be realized lies in the excessive capital expenditures of over $25 billion, continued negative free cash flow, the demand for Robotaxi and the pace of capacity expansion, the timetable and demand expansion pace of the humanoid Siasun Robot & Automation, continuing challenges with the Optimus humanoid Siasun Robot & Automation production and demand expansion. It is understood that Morgan Stanley's analyst team's core judgment logic for the target stock price expectation of Tesla, Inc., one of the seven giants of the US stock market (Magnificent Seven), is very clear: the stronger-than-expected improvement in the electric vehicle delivery business recently has raised the profit floor, but what will determine whether Tesla, Inc. can be re-rated is not selling a few more vehicles, but whether the large energy storage systems related to Robotaxi, FSD, Optimus, and AI can prove that Tesla, Inc.'s exclusive physical AI system has entered a commercialization phase at scale. $417 is a highly "AI-ized" valuation, not an automotive valuation: the automotive recovery is just the base, physical AI is the stock price bull market engine Tesla, Inc. will announce its quarterly results next Thursday morning Beijing time. Morgan Stanley is predicting revenue for the second quarter to be $28.363 billion, 11% higher than market expectations; adjusted EPS to be $0.69, 41% higher than expectations; and the gross profit margin of the automotive business, excluding credits, to be 18.1%, slightly higher than the market's expected 18.0%. However, the outlook for the full year is not entirely optimistic: revenue forecast for 2026 is $102.4 billion, slightly lower than market expectations; adjusted EBITDA is $16.181 billion, EPS is $2.20, both higher than market expectations by 3.4% and 13.4% respectively; at the same time, capital expenditures are expected to reach $26.8 billion, and free cash flow is expected to be negative $11.432 billion, significantly worse than the market's expected negative $8.136 billion. In the view of the analyst team at Morgan Stanley, Tesla, Inc. is leveraging the cash flow base formed by the partial recovery of the automotive business stage to fund an unprecedented arms race in cutting-edge AI, FSD autonomous driving software, Robotaxi, energy storage systems, humanoid Siasun Robot & Automation, and the AI chip manufacturing infrastructure envisioned by Musk, "Terafab." Morgan Stanley's forecast path implies a compound annual growth rate of approximately 17% in revenue from 2026 to 2028, but the company is expected to continue burning cash in 2026 and 2027 until it returns to positive free cash flow in 2028. Therefore, Morgan Stanley's outlook for Tesla, Inc.'s future performance is for moderate revenue and delivery recovery, stabilization of traditional automotive profits, followed by AI investments consuming cash flow in the short term, waiting for commercialization to materialize later. Their model does not assume a return to super-fast growth in the traditional automotive business: deliveries in 2030 are expected to only increase slightly from 2.635 million vehicles to 2.65 million vehicles; true long-term profit elasticity will come from the expansion of the energy storage system driven by AI, FSD subscriptions, Robotaxi platform commissions, fleet services, and the strong demand for Optimus. The $417 target price from Morgan Stanley consists of five parts: $47 for the traditional automotive business, $40 for the energy storage and energy business, $125 for Robotaxi/Tesla Mobility, $146 for Network Services, and $60 for Humanoids (i.e., Optimus humanoids from Siasun Robot & Automation). In other words, Network Services, Robotaxi, and Humanoids contribute approximately 79% of the target valuation, while traditional automotive contributes only about 11%. Even in the base prediction scenario, the overall valuation given by Morgan Stanley is around 53 times expected EV/EBITDA for 2030; in a bullish scenario, the target price is $841, while in a bearish scenario, it is only $137. This wide valuation range indicates that Tesla, Inc. is no longer priced linearly based on car sales and per-vehicle profit but rather on whether the AI computing power and AI applications, along with the physical AI-related projects such as the humanoid Siasun Robot & Automation, can deliver on their highly optimistic market valuation. In terms of the most optimistic base target price, based on the mainstream sell-side 12-month target price metric, the highest currently is $600, given by the Wedbush analyst Dan Ives. At the latest price of $391.06, this implies a potential upside of about 53.4% and a potential market value of about $2.12 trillion. Similar to Morgan Stanley's projections, Ives' core logic is not the cyclicality of electric vehicle sales but that investors are underestimating Tesla, Inc.'s transition from an electric car manufacturer to a "physical AI super-platform": the AI supercomputing system driving Tesla, Inc.'s FSD autonomous driving software transforming existing vehicle fleets into a high-margin software network, Robotaxi transforming autonomous driving into a mileage-based mobile service, and Optimus further expanding the same set of visual, reasoning, and control capabilities to the general labor market. In other words, the $600 base target price from Wedbush analyst Dan Ives is based on the assumption of these businesses, including advanced AI technology, autonomous driving and humanoid Siasun Robot & Automation, energy storage systems, driving a restructuring of Tesla, Inc.'s business model and valuation multiple far above market expectations; any delays in the expansion plan for unmanned taxi fleets or the start of Optimus production would quickly shrink the valuation premium on which this target price depends. As per the analyst team at Morgan Stanley, the $841 target price is not an official target price but a scenario valuation based on the assumption that Robotaxi fleet, high attachment rates for FSD, high ARPU for network services, commercialization of Optimus, and expansion of the energy business all materialize simultaneously. Tesla, Inc.'s current market capitalization is around $1.38 trillion, with a static price-to-earnings ratio of approximately 359 times, taking into account a significant probability of AI success. Therefore, the future stock price will not continue to rise simply because there is progress in AI computing power, AI applications and physical AI-related projects; it will need to demonstrate sustainable cash flow through metrics such as unsupervised safety miles, Robotaxi fleet utilization rates, FSD subscription and profitability, Optimus mass production yield rates, and capital expenditure return rates. In the most optimistic base target price scenario, Morgan Stanley's target price indicates a significant upside of around 115% and a potential market value close to $2.98 trillion. With the latest price of approximately $391.06, this would correspond to only about a 6.6% potential upside to the $417 target price, which is fully consistent with their "Equal-weight" rating. However, the $841 bull market scenario from Morgan Stanley would correspond to a significant upside of around 115% and a potential market value close to $2.98 trillion. The $841 bullish market target price is based on the assumption of a much more optimistic realization of the progress of various businesses, including Robotaxi, network services, FSD autonomous driving subscriptions, energy storage systems, humanoid Siasun Robot & Automation, and the potential chip manufacturing factory "Terafab" under Musk's leadership, rather than just the 12-month base target price.