Investors remain focused on demand for electric vehicles ahead of Tesla’s long-awaited robotaxi event.
Expectations are high for Tesla (TSLA 3.91%)’s “We, Robot” event on October 10th. Investors are looking forward to hearing from CEO Elon Musk about the next stage of growth for the electric vehicle (EV) company, especially in terms of: Recent slump in EV demand.
Tesla’s stock price has fallen after it announced its third quarter production and delivery results. The company delivered 462,890 vehicles, which was within the 460,000 to 465,000 range expected by analysts, but investors were likely hoping for more.
Wall Street has mixed opinions on Tesla stock, but Morgan Stanley analyst Adam Jonas takes a long-term view on the company’s prospects. He rates the stock “overweight” and has a price target of $310, which represents an upside of about 27% from current levels.
Reasons to buy Tesla stock
The analyst said more than 80% of Tesla’s expected 2024 revenue will come from EVs, but the business could change over time. The company is working heavily on artificial intelligence (AI) to lay the foundation for its robotaxi service, which could one day contribute to a significant portion of Tesla’s revenue and profits. The stock could rise if investors get a clearer understanding of Musk’s vision for Tesla in its robotics and other AI efforts.
In fact, Musk calls Tesla an AI and robot company rather than a car company. The analyst cited Tesla’s relationship with xAI (also led by Musk), which developed the Grok conversational AI model. During the company’s second-quarter earnings conference, Musk acknowledged that Tesla has learned a lot from xAI.
Tesla’s upcoming events should provide a clearer picture of the company’s future in AI, which Jonas apparently believes will be a catalyst for the stock price to rise. However, EVs remain Tesla’s main business for now, so its stock performance into 2025 will still be heavily influenced by EV demand.
