Tesla shares nudged higher in early Tuesday trading, and look set to arrest a post tariff-reaction slide that has lopped more than $170 billion from their market value, as a top Wall Street analyst pitched another bull case for the beleaguered electric-vehicle maker.
Shares of the Austin group (TSLA) have whipsawed over the past month. They surged more than 28% over seven days in late March, tied to comments from CEO Elon Musk during a town hall event broadcast on X, then fell around 19% into yesterday’s close as investors counted the cost of China tariffs on the EV maker’s global export business.
The group’s weaker-than-expected first-quarter deliveries, which fell 13% from a year earlier and slumped 32% from the fourth quarter, were also seen a harbinger of the Tesla brand damage tied to Musk’s political activities and his role as President Donald Trump’s federal government cost-cutting adviser.
Morgan Stanley analyst Adam Jonas in fact said no other name in his coverage list “is more closely tied to these volatile trade and political debates.”
The longtime Tesla bull, who reiterated his $410 price target and overweight rating on Tesla stock in a Tuesday note, said, however, that Musk’s focus on robotics, autonomous driving and energy storage are likely to drive longer-term value for the beaten-down stock.
During a town hall meeting last month, Elon Musk urged Tesla employees to ‘hang on to their stock.’
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Jonas argued that Tesla’s capabilities in “key areas of physical AI, including data, robotics, energy storage, compute and manufacturing, … offer growth and margin opportunities that greatly exceed those of the traditional EV business, which is under pressure.”
Those abilities, Jonas said, will more than offset near-term concern about tariff risks.
‘Embodied AI’ may be big Tesla boost
“Regardless of the near-term policy path, we believe the march of ’embodied AI’ will see a proliferation of machines … the ability to ‘produce’ labor in a factory as machines make machines with minimal human intervention … may alter historical measurements such as dependency ratios, retirement age and GDP per capita,” Jonas said.
All that said, Tesla shares are still down nearly 40% for the year and have shed more than $660 billion in value since their mid-December peak, with a key first-quarter-earnings report slated for April 22.
Analysts are looking for a bottom-line profit of 45 cents a share on revenue of around $22.38 billion.
Related: Tesla Q1 deliveries tumble as Elon Musk’s political role hammers sales
Profit margins have narrowed by a third over the past three years, the group reported its first-ever sales decline on record in 2024, and Musk’s promises about Cybercabs, robots and autonomous software updates have yet to materialize.
And absent a rally tied to Trump’s election last November, fueled in part by the nearly $300 million in donations from Musk himself, the stock is basically trading at levels last seen in August 2021.
Tesla brand destruction is real
The Tesla brand, meanwhile, is also under siege. Once seen as the poster children for green-energy automation, Musk’s cars are now under attack, literally and figuratively, by protesters worldwide.
European sales are in free fall, competitors in China are leaving it behind, and the so-called Takedown Tesla movement is tarnishing its image by the day.
Jonas, however, is looking further into the future.
Related: Elon Musk rides to Tesla’s defense
“We believe the rise of Embodied AI — machines equipped with sophisticated robotics and agentic software that can operate in 3D physical space — will be transformative,” he said.
“Tesla is at the forefront of this movement. Over the next one to two decades, the proliferation of humanoid robots could fundamentally reshape the concept of production itself.”
Tesla shares were marked 3.6% higher in premarket trading to indicate an opening bell price of $241.63 each.
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