Keep an Eye on the Bigger Picture,’ Says MS about Tesla

Keep an Eye on the Bigger Picture, Says Morgan Stanley About Tesla Stock

Tesla stock took a sharp hit last week after Elon Musk and once close buddies turned on each other in a public social media spat that quickly became an online spectacle. While the internet grabbed its popcorn to watch the drama/comedy unfold, investors were less amused, driving the stock down and wiping out a record $152 billion in market value. Trump warned he might yank Elons federal subsidies and contracts, while Musk took jabs at Trumps links to Jeffrey Epstein and called for his impeachment. Now, Trump says hes considering ditching his Tesla. But what does Wall Street have to say about all this madness?
Morgan Stanley analyst Adam Jonas, one of the Streets biggest TSLA bulls, shared a few pith and marrow thoughts in the wake of the public spat.
According to Trump, the whole thing kicked off because Musk was upset his Big Beautiful Bill was not beneficial to Tesla. However, Jonas makes short shrift of the implications.
We do not believe the phasing out of EV tax credits from the BBB (Big Beautiful Bill) is material to the long term outlook for TSLA, the analyst said
While Musks involvement with the Trump administration and his increasingly polarizing politics were the cue from a massive drop in sales for Tesla earlier this year, Jonas does not think the argument will help bring back buyers that once considered buying a Tesla but were turned off by Musks recent activities. In fact, Jonas thinks the argument could potentially (temporarily) alienate multiple sides of the political spectrum.
Yet, zooming out, Jonas thinks its important to keep an eye on the bigger picture and that offers plenty of promise.
While emotions are running high, we are not convinced the longer-term vectors that drive the stocks value have changed here, he said. leadership, autonomy/robotics, manufacturing, supply chain re-architecture, renewable power, critical infrastructure Tesla still holds so many valuable cards that are largely apolitical, in our opinion. Nevertheless, investors should prepare for a rocky ride over the near-term. Donning his trading cap, Jonas feels more confident about short-term volatility than about the stocks immediate direction.
The analyst says hes sticking with his $410 price target on Tesla shares, even as he braces for the stock to post further losses. That figure implies a one-year gain of 36%. Meanwhile, Jonas maintains an Overweight rating (i.e., Buy). (To watch Jonas track record, )
That view, however, stands in contrast to the broader Street sentiment. Based on a mix of 16 Buys, 10 Holds, and 10 Sells, the analyst consensus rates the stock a Hold (i.e., Neutral). Going by the $285.91 average target, the shares are expected stay range-bound for the foreseeable future.