Tesla's stock price is expected to reach $800? Morgan Stanley indicates it is possible

Wall Street broker Morgan Stanley believes that as the integration of autonomous vehicles and artificial intelligence attracts more investors' attention to this popular stock, Tesla's share price could soar to $800 (from $1,293).

The broker's "bullish" target price is nearly double Tesla's last closing price of $403.31. Although the stock has fallen 18% from its historical high in December, it has still risen over 80% in the past three months.

Morgan Stanley stated that investors are beginning to appreciate Tesla's leadership in the field of artificial intelligence and its expertise in data collection, robotics, and energy storage, which drives the company to dominate the emerging autonomous driving market.

This may offset concerns about the slowdown in electric vehicle sales in the U.S. and Europe, which limits Tesla's valuation.

Morgan Stanley's well-known automotive analyst and Tesla bull Adam Jonas wrote in a report to clients, "We still believe that 2025 will be a year when the market's appreciation of Tesla's unique skill set can be further reflected in its price-to-earnings ratio."

He noted that this would offset the "relatively well-known challenges" facing the electric vehicle market this year.

In a 24-page report, Morgan Stanley raised Tesla's fundamental target price from the previous $400 to $430 and reiterated its "preferred" status. Jonas stated that this is the broadest expansion of Tesla's autonomous driving ride-sharing model since its initial release in 2015.

The updated model includes Tesla's latest advancements in artificial intelligence and embodied AI—integrating AI into physical entities such as robots. Morgan Stanley believes Tesla has established a "substantial" competitive advantage in this area.

Jonas stated, "Investors are increasingly recognizing the relevance of embodying artificial intelligence in a competitive and complex geopolitical environment."

The report emphasizes the importance of Tesla's autonomous driving ride-sharing division (i.e., Tesla Mobility), with Morgan Stanley valuing this division at $90 per share.

This is based on the expectation that the number of mobility fleets will grow to 7.5 million by 2040, generating $1.46 in revenue per mile, with an EBITDA margin of 29%.

Morgan Stanley's bullish forecast is that by 2040, the number of vehicles will reach 12 million, with an EBITDA margin of 45%.

Jonas predicts that Tesla's first urban autonomous vehicles will be deployed next year and gain broader recognition after 2030.

The broker also pointed out the increasing importance of Tesla's network services division, which includes recurring revenue sources such as Supercharging, software, and full self-driving subscriptionsIt is expected that by 2030, the sector will contribute one-third of Tesla's total revenue, rising to nearly 60% by 2040. The brokerage currently values the sector at $168 per share.

For years, Jones has been trying to emphasize Tesla's potential dominance in the electric vehicle hardware space (i.e., semi-automated electric robots), transforming car owners into "subscribers" that can generate recurring high-profit income.

Tesla's strategy has seen some success, and Morgan Stanley believes that investor attention will only accelerate due to the increasing influence of billionaire founder Elon Musk on the incoming Trump administration.

Tesla CEO and former Republican presidential candidate Vivek Ramaswamy has been appointed head of the Department of Government Efficiency, which aims to dismantle bureaucracy, cut regulations, and reorganize agencies.

Source: financial review