Morgan Stanley supports Tesla: Musk has a lot of cards in hand! The "Trump&Musk farce" does not hinder the bull market narrative

According to the Zhitong Finance APP, Morgan Stanley, a Wall Street financial giant known as a "super bull" for Tesla, has recently issued a very strong bullish research report on Tesla again. The analyst team from Morgan Stanley stated in a recent report that although the public split between CEO Elon Musk and U.S. President Donald Trump, which has attracted global attention, will bring relatively unfavorable factors to Tesla's stock price in the short term, they still maintain an "Overweight" rating on Tesla (TSLA.US) stock and reaffirm the long-held target price of $410.

The $410 target price insisted upon by Morgan Stanley, the "super bull" of Tesla, implies that the analysts believe there is nearly a 40% upside potential for Tesla's stock price over the next 12 months compared to last Friday's closing price. Morgan Stanley stated that Musk has many cards in hand, with Tesla alone involved in numerous cutting-edge technology fields in the U.S. and globally, including AI (artificial intelligence), an autonomous driving network based on Tesla's AI system, humanoid robots, AI + manufacturing, military + drones, battery energy, and energy storage. These are core areas of the "manufacturing returning to the U.S." policy that the American people and government will rely on for a long time to create sustainable jobs, and there are no comparable alternatives to Tesla in these fields for a long time.

Due to the unexpected escalation of this dispute last Thursday, Tesla's stock plummeted nearly 15% last week, with Musk and Trump engaging in personal attacks on social media. On that Thursday alone, the "Trump & Musk" dispute led to a single-day drop of over 14% in Tesla's stock price, marking the largest single-day market value loss in history, while dragging down the S&P 500 and Nasdaq on Thursday. On Friday, Tesla's stock price rebounded slightly, rising nearly 4%. Since the beginning of 2025, Tesla has accumulated a decline of over 25%.

However, it is believed that the rhetoric between Trump and Musk significantly toned down over the weekend, although media reports indicate that Trump has no plans for direct talks with Musk; Musk had previously stepped down from his position in the White House at the end of May.

The core of the dispute seems to revolve around the "Big and Beautiful" tax and spending bill led by the Trump administration, which Musk has sharply criticized multiple times.

One of the latest signals suggesting that the intense dispute between Trump and Musk may be easing is that legendary hedge fund figure and major Republican donor Bill Ackman posted on social media X, acting as a mediator, stating that everyone is working for the national interest of the U.S. and should coexist peacefully, to which Musk replied, "You are right." Therefore, Musk's response to Ackman is seen as a sign that both sides are beginning to back down.

Another signal indicating a retreat from both sides is that Trump stated that Los Angeles has been invaded and occupied by illegal immigrants and criminals, and he has appointed several White House officials to address this issue, asserting that the chaos will be brought to an end and Los Angeles will return to safety After retweeting, Musk commented on the two American flags, clearly taking a stance in favor of Trump.

"Super Bull" Supports Tesla's Long-Term Fundamental Expectations

Morgan Stanley, known as Tesla's "super bull," stated that the gradual removal of electric vehicle tax credits in the "Big and Beautiful" bill led by the Trump administration is not significant for Tesla's stock price and long-term fundamentals.

The firm's analysis team pointed out that the over 50% rebound in Tesla's stock price during the bottoming period from April to May may stem from Musk's commitment to stepping back from U.S. government affairs, dedicating more time to Tesla, and investors betting on Tesla's future as the absolute leader in AI, autonomous driving, AI + manufacturing, and humanoid robotics.

The Morgan Stanley analysis team also noted that increased political attention may "temporarily alienate" customers and corporate clients with differing political views, thereby putting more demand pressure on Tesla's products.

For instance, due to the discontent of U.S. Democratic consumers and European consumers regarding Musk's political actions, as well as intensified competition in the Chinese market and aging Model series vehicles, Tesla's global sales have significantly declined over the past few quarters.

However, the Morgan Stanley analysis team believes that Tesla's long-term outlook remains very optimistic. "Although bearish sentiment is high in the short term, we do not believe that the long-term factors driving Tesla's stock price towards $410, or even $800 bull market levels, have changed in any way."

"Telsa's leadership in AI supercomputing systems, FSD based on Tesla AI supercomputing, autonomous taxi networks, humanoid robotics technology, AI + manufacturing, supply chain restructuring, renewable energy, and critical energy storage infrastructure... In our view, Tesla under Musk still holds many growth potentials and vast employment opportunities, largely unrelated to the U.S. political environment and a trump card that the American public cannot escape in the long term," the Morgan Stanley analysts wrote in their report.

The Morgan Stanley analysis team particularly emphasized that Musk himself has always viewed artificial intelligence, humanoid robotics, FSD (Full Self-Driving), and autonomous taxis as the growth engines for Tesla's next phase. However, Morgan Stanley warned that Tesla's stock price may still fluctuate in the short term and could be relatively weak in the coming week.

Core of Tesla's "Long-Term Bull Market": FSD, Robotaxi, and Optimus

It is reported that Morgan Stanley has set a long-term bull market target price of $800 for Tesla and emphasized that the "long-term bull market logic" remains unobstructed. The core logic behind Morgan Stanley's long-term bullish outlook on Tesla lies in the deep penetration of the FSD autonomous driving system, the fully autonomous Robotaxi network, and the immensely large AI humanoid robotics business (i.e., Optimus AI humanoid robot)—Morgan Stanley expects the robotics market size to far exceed the current global automotive market.

Morgan Stanley's analysis team believes that Tesla's current high market value, which is significantly higher than that of traditional automakers, is still difficult to support with traditional business profitability. Investors generally only value its automotive business at a benchmark of $50-100 per share, and this limitation is akin to viewing Amazon merely as an ordinary online retailer or considering Apple as just a hardware manufacturer. Morgan Stanley states that the core logic of Tesla's value lies in its "a series of cutting-edge startup business combinations"—artificial intelligence large models, autonomous driving networks, humanoid robots, battery energy, energy storage, and other future potentials.

With ChatGPT continuing to gain global popularity and the new "AI large model computing paradigm" led by DeepSeek, which focuses on "extremely low cost" and "high efficiency" comparable to OpenAI, a new wave of AI is emerging. Artificial intelligence large models are beginning to deeply integrate with various industries such as healthcare, finance, and education, as well as with consumer electronics and other application terminals, ushering human society into the AI application era. In Morgan Stanley's view, Tesla, which possesses the Dojo artificial intelligence supercomputing system and the Optimus robot (Optimus humanoid robot) system, will be one of the biggest beneficiaries of the "global AI application wave."

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

Morgan Stanley's research report mentions that there are nearly 4 billion people in the global workforce, with an average annual salary of about $10,000—corresponding to a labor market of about $40 trillion. If a single Optimus humanoid robot is rented at a cost of $5 per hour, it can replace two human workers earning $25 per hour—based on this calculation, each humanoid robot has a net present value (NPV) of about $200,000. The U.S. labor market has about 160 million workers. Conservatively estimating that if 1% of the workforce is replaced by humanoid robots, it would create over $300 billion in value, equivalent to an increase of about $100 per share in Tesla's market value. Therefore, the boost brought by the Optimus humanoid robot is astonishing for Tesla's future stock price and market value prospects