Tesla (NASDAQ: TSLA) stock jumped during intraday trading after Morgan Stanley designated it as its “top pick” in the U.S. automotive sector, replacing Ford (NYSE: F).
Morgan Stanley believes that Tesla’s energy business could eventually surpass its auto division in value. The firm highlighted that as investors increasingly focus on climate change solutions, Tesla’s energy ventures are poised for significant growth.
The brokerage firm also forecasts that Tesla will dominate the market for zero-emission vehicle credits, particularly as legacy automakers scale back their electric vehicle (EV) plans. Tesla earned about $2,000 per unit in credits during the second quarter.
Morgan Stanley analysts said,
“We estimate Tesla may account for up to half of the credit sales in the market, which would support a 100% margin business for Tesla—something the investment community may not anticipate at this time.”
However, Tesla reported its lowest profit margin in over five years last week and missed Wall Street earnings targets for the second quarter, as the Elon Musk-led firm heavily discounted its vehicles to counter sagging demand.
Moreover, the brokerage raised concerns about Tesla’s ability to commercialize its autonomous driving technology in China and questioned the future demand for EVs.
Tesla has been heavily investing in its autonomous driving technology. However, it has faced regulatory scrutiny due to safety concerns.
Investors eagerly await the company’s robotaxi launch event. Tesla has postponed it from August to October to refine the vehicle’s design.
Meanwhile, Ford Motor stock dropped nearly 2% on Monday, following a 20% decline the previous week. The slump came after the automaker reported second-quarter profits below estimates, amid challenges with quality-related costs and intense competition in the EV market.
Tesla (NASDAQ: TSLA) Stock Reaction
TSLA stock surged 5.60% on Monday, closing at $232.10, marking a 7.72% decrease for the week. The trading volume was 129,201,792 shares, higher than the average daily volume of 96.47 million.
Latest News on Tesla Inc (TSLA) Stock
Salman Akhtar is a finance, stocks, and technology journalist with years of experience across various news organizations. He has contributed his expertise to outlets such as 24NewsHD, TrimFeed, The Voice Pakistan, and TheTechBasic. Salman is passionate about making complex topics accessible to a broad audience. His dedication to delivering accurate and timely information has established him as a trusted voice in the industry. Read Full Bio
