Artificial intelligence is dominating the manufacturing renaissance! Morgan Stanley deeply decodes Tesla's "six maintenance moats"

According to the Zhitong Finance APP, as trade negotiations between the United States and several major global economies show positive signals, and with financial giants such as BlackRock and top Wall Street investment firm Oppenheimer recently supporting the AI investment theme, emphasizing that the so-called "AI investment logic" still possesses strong long-term investment return growth potential, coupled with the Trump administration's plan to significantly adjust the strict export restrictions on advanced AI chips imposed during the Biden administration—potentially replacing Biden's overly stringent export bans with simpler and more lenient rules—technology stocks closely related to AI have recently rebounded strongly.

The "AI investment logic" has recently resurfaced in global stock markets, or in other words, AI, which has been the hottest investment theme globally since 2023, has regained the focus and favor of global capital. This is also an important logic behind the rebound in the stock price of Tesla, the electric vehicle and autonomous driving leader that has been continuously delving into the AI field in recent years.

Tesla, led by the world's richest man Elon Musk, has developed an increasingly mature fully autonomous driving version FSD based on an AI supercomputing system, as well as a fully autonomous Robotaxi system based on FSD, making Tesla a long-term "popular AI concept stock." Tesla's ongoing diversification into cutting-edge technology fields such as artificial intelligence (AI) and humanoid robots is also the core logic behind some investment institutions' long-term bullish outlook on Tesla's stock price.

It is understood that another financial giant on Wall Street, Morgan Stanley (hereinafter referred to as "Morgan"), recently released a deep research report indicating that the seemingly contradictory yet extremely perfect deep integration of artificial intelligence and traditional/high-end manufacturing is expected to drive the long-dormant U.S. manufacturing sector into a revival mode. Tesla can be regarded as the most perfect fusion target of "AI + manufacturing."

In this report, Morgan analyzes Tesla's competitive advantages through the "Six Dimensions of Moat" framework, believing that its strong "AI + manufacturing" expansion blueprint is the core competitive barrier of its electric vehicles, FSD subscriptions, and Robotaxi.

The Morgan analyst team stated that the global diffusion of artificial intelligence makes the return of manufacturing to the U.S. necessary; at the same time, the diffusion of artificial intelligence also significantly increases the possibility of comprehensive manufacturing return. Thus, artificial intelligence is both the reason for the comprehensive revival of U.S. and even global manufacturing and its result. Morgan reiterated its "overweight" rating on Tesla stock, the most optimistic bullish rating, with a target stock price of up to $410, and Tesla continues to rank on Morgan's "preferred stock" list.

Artificial Intelligence and Manufacturing are a "Match Made in Heaven"! Tesla Has Six Exclusive Advantages

The Morgan Stanley analysis team mentioned in their research report that "AI chip giant" NVIDIA's (NVDA.US) CEO Jensen Huang recently visited the White House, profoundly revealing and emphasizing the seemingly peculiar yet absolutely essential important relationship between artificial intelligence and traditional/high-end manufacturing. "Mr. Huang's impromptu remarks on American manufacturing on May 1st captured the essence of the relative advantages of Tesla that we are trying to convey to investors with precision, which is why we have included Tesla in our 'preferred stock' list," the Morgan Stanley analyst team wrote in the report.

"Mr. Huang's original words best illustrate this point: Manufacturing is no longer about low-cost manufacturing models. Manufacturing is about high technology itself."

"The large AI supercomputing systems being built now are the most advanced manufacturing bases of the future, and most factories will be the most advanced future factories. We will use artificial intelligence, humanoid robots, and immersive metaverse digital twin technology to create future-style factories. And we must build them right here in the United States."

"This new industry is also part of manufacturing... (here Mr. Huang points to super AI computers) which is a factory-like large machine." The above is an excerpt from Mr. Huang's important speech at the "Investing in America" conference, as cited by the Morgan Stanley team.

The Morgan Stanley analysis team wrote: We are often asked by investors what the secret of Tesla's Gigafactories is. Where is Tesla's moat? In fact, it is not just a single factor, but a comprehensive combination of six dimensions that sets Tesla apart from any peers in "AI + manufacturing," the electric vehicle manufacturing industry, or the autonomous taxi field.

The following are the six moats of Tesla summarized by the Morgan Stanley analyst team in the fields of "AI + manufacturing," electric vehicle manufacturing, Robotaxi, and autonomous driving, known as DREAMS.

Data (D). There are currently 7 million Tesla-branded electric vehicles on the road, and this number is expected to exceed 100 million by 2040, which means the scale of visual and comprehensive traffic data that Tesla can acquire is far greater than its peers.

Robots (R). Tesla has internally developed motors and actuators based on exclusive research. Just the hands of the Optimus robot (humanoid robot) have 22 degrees of freedom.

Energy (E). Tesla is a global leader in large-scale battery storage solutions.

Artificial Intelligence (A). Tesla has a world-class AI team, and the Grok series of AI large models launched by xAI, founded and led by Musk himself, may be deeply integrated with Tesla's AI supercomputing system in the future Tesla has developed FSD (Full Self-Driving), the Dojo supercomputer, and customized AI chips. The FSD built on Tesla's AI supercomputing system, with the integration of the advanced Grok model, is equivalent to "the brain experiencing an upgrade in intelligence level," and serves as a strong catalyst for Optimus, which requires rapid reasoning capabilities based on visual scenes in a very short time.

Manufacturing (M). It is the electric vehicle company with the highest degree of vertical integration globally and the highest proportion of domestic supply chain in the United States, integrating artificial intelligence systems, humanoid robots, integrated automotive casting production lines, and powerful energy storage solutions, representing the most advanced productive forces in manufacturing. The strongest domestic supply chain helps Tesla remain completely immune to the "tariff storm" unleashed by the Trump administration.

Space (S). It provides redundant, resilient, and the highest level of cybersecurity communication modes. SpaceX is expected to serve as the data transmission layer—the core connection link of the artificial intelligence ecosystem.

Morgan Stanley stated, in the six critical dimensions of "AI + Manufacturing" that Tesla uniquely possesses, what is the most crucial single component of the moat that Musk anticipates for this technology company? Undoubtedly—manufacturing. Tesla's leading global advanced manufacturing model is the foundational base for electric vehicles, FSD subscription models, humanoid robots, and Robotaxi. Considering the six dimensions, Morgan Stanley is bullish on Tesla's stock price reaching $410 within the next 12 months and maintains an "overweight" rating. As of Wednesday's market close, Tesla's stock price was $276.220.

Morgan Stanley's analyst team wrote: "You need to manufacture probes (products) to collect data, which in turn improves the probes, and then collect more data to further enhance the probes, completing this closed loop. Data determines software, software determines hardware, and hardware determines manufacturing. Musk uses the automotive industry as a testing ground to cultivate his capabilities in other areas... For Tesla, cars are to it what books are to Amazon."

Knowledge and Atoms (Thinkers and Doers): Insights from Alexandria

Morgan Stanley's analyst team likened the historical lesson of the separation between the "Thinker (Knowledge)" and "Doer (Atoms)" at the Alexandria Museum to the common ailment of today's digital economy (knowledge) and physical economy (atoms) often being separated; Tesla is regarded by them as a leader in the new frontier paradigm of "AI + manufacturing" precisely because Tesla, led by Elon Musk, has re-welded the two worlds of knowledge-software-data and manufacturing-hardware-factories together.**

Morgan Stanley stated that this corresponds exactly to the six moats listed for Tesla in the report (data, robotics, energy, AI, manufacturing, space) — particularly highlighting the core position of manufacturing in the closed loop.

To help clarify the diffusion of artificial intelligence from the digital economy (the economy of bits and bytes) to the real economy of global economic entities (the economy of atoms and photons), the Morgan Stanley analyst team cited Chapter 27 of H.G. Wells' 1922 work "A Short History of the World": "The Museum and Library of Alexandria." This cited example aims to convey that although the Library of Alexandria represented the most comprehensive collection of knowledge in the ancient world at the time, its progressive ideas were ultimately limited due to the complete separation of "thinkers" and "doers."

Below is the excerpt from the "Museum and Library of Alexandria" chapter cited by the Morgan Stanley analyst team:

H.G. Wells wrote: "Here we see the systematic collection and dissemination of knowledge. The establishment of this museum and library marks the beginning of a great era in human history."

"But the research and dissemination work were carried out under very difficult obstacles. One of them was the enormous social divide that distinguished the gentleman philosopher from the merchants and craftsmen."

"There were a large number of glassmakers and metalworkers at that time, but they were intellectually disconnected from those thinkers. The glassmaker produced extremely beautiful colored beads and exquisite items like small bottles, but he never made a Florentine flask or lens. Transparent glass seemed to hold no interest for him."

"The metalworker made weapons and jewelry, but he never made a chemical balance. The philosopher spoke grandly about the nature of atoms and all things, but he had no practical experience in enamels, pigments, filters, and so on. He was not interested in matter."

"Thus, the microscope and the discipline of chemistry were not born in Alexandria during that brief moment of opportunity. Although Hero invented a steam engine called the aeolipile, it was never used to pump water, sail boats, or do anything useful."