Tesla jumps 2% as Morgan Stanley backs AI and robotics efforts as the ‘best choice’

Tesla shares rose 2% Monday after Morgan Stanley reinstated the electric-vehicle maker as its top U.S. auto pick, saying the company’s artificial intelligence and robotics efforts could drive growth even as the mainstream auto business stumbles.

Sunday’s note was the latest from analyst Adam Jonas, a Tesla veteran. Bull, who has praised the company’s momentum beyond cars as sales face pressure from high U.S. borrowing costs and fierce competition with China’s BYD.

Industry data showed Tesla sales fell 45% in Europe in January, while overall electric vehicle sales rose 37% in the region. Jonas said recent setbacks, including Tesla’s first drop in annual deliveries in 2024, signaled its shift from a “pure automotive company to a company highly diversified in artificial intelligence and robotics.”

It confirmed its $430 price objective, one of the highest on Wall Street, representing a 44% increase over the stock’s previous move.