Morgan Stanley has elevated its price target for Tesla, moving it from 400 to 430. This revision highlights the company’s strides in autonomous vehicle technology and its ambitious focus on embodied AI.

Key Reasons Behind the Revised Price Target

1. Growth of Tesla Mobility

   • In updated evaluations, this division is valued at 90 per share.
   • The fleet is expected to expand significantly to 7.5 million units by 2040.
   • Projected revenue states 1.46 per mile with a solid 29% EBITDA margin.

2. Expanding Network Services

   • The recurring revenue streams from services include:
   • Fully Self-Driving (FSD) options.
   • Public charging points.
   • Regular software enhancements.
   • This segment could contribute to about a third of Tesla’s EBITDA by 2030, projected to soar to nearly 60% by 2040.
   • Valuation for this is now pegged at 168 per share, underlining its critical role in Tesla’s expansion.

3. Potential of Embodied AI

   • Tesla’s leadership stems from its strong capabilities in data analytics, robotics, and energy storage.
   • Untapped potential in sectors like aviation could further augment long-term valuations.

Weighing Growth Challenges

Despite an increase in the Mobility and Network Services sector evaluation, Morgan Stanley noted a slight decrease in the valuation of Tesla’s third-party battery division. Nevertheless, the overall promise of embodied AI technology remains compelling as a significant growth driver.

Advice for Investors

Investors keen on Tesla’s evolution should keep an eye on quarterly and annual reports. For detailed discussions and future projections from management, access tools that deliver essential financial insights.

Wrapping Up

Tesla’s emphasis on honing autonomous solutions and network services has significantly transformed its growth narrative. Stakeholders should remain attentive to developments in these pivotal sectors to unlock new opportunities.