Morgan Stanley has reaffirmed its Overweight rating on Tesla Inc (NASDAQ:TSLA), establishing a price target of $410, suggesting nearly a 39% upside from last week’s closing price despite recent political challenges facing the electric vehicle leader.

Political Drama vs. Strong Fundamentals

Tesla’s stock faced a 15% decline last week following CEO Elon Musk’s escalating public conflict with President Donald Trump on social media. Although Musk resigned from his White House advisory position in May and criticized Trump’s latest tax legislation, Morgan Stanley maintains that Tesla’s growth trajectory remains unaffected.

Reasons for the Reaffirmation

According to Morgan Stanley analysts:

• The removal of EV tax credits due to Trump’s tax policies has little impact on Tesla’s long-term outlook.

• Tesla continues to lead in AI and robotics innovations, maintaining an edge over both legacy automakers and emerging EV companies.

• Though short-term demand risks are acknowledged, primarily stemming from political factors, Tesla’s core value remains robust.

Tesla’s Resilience Beyond Media Distractions

As sales decline and competition intensifies from companies like BYD in China, Morgan Stanley believes Tesla’s advantages lie in:

• Leadership in autonomous driving technology

• Optimizing manufacturing and supply chains

• Delivering energy solutions and renewable resources

• Integrating AI and robotics

In the analysts’ words, “While emotions are running high, we remain convinced that the long-term factors fueling the stock’s value remain unchanged.”

Tesla’s AI Focus: Central to Its Future

Elon Musk is emphasizing that Tesla’s ambitions go beyond electric vehicles. The company is advancing in self-driving technology, humanoid robots, and AI integration, encouraging investors to view these innovations through a long-term lens, despite short-term market noise.

Final Insight

Even with political strife and reduced tax incentives, Morgan Stanley remains optimistic about Tesla’s innovative pipeline. For long-term investors, the current dip in stock price might represent a strategic buying opportunity rather than a warning sign.

Keep track of Tesla’s evolving strategies by analyzing its transformation driven by R&D.