Morgan Stanley interprets "Tesla" being torn apart: Musk is meticulously designing it, and the market has underestimated his capabilities; there will be many trading opportunities in the future.

Morgan Stanley believes that the "TSL dispute" is not a spur-of-the-moment decision, but rather a carefully planned strategy by Musk aimed at achieving specific goals and garnering maximum public attention. He has brought the issue of the U.S. budget deficit and debt to the public's attention because he believes that no matter how successful companies like TSL and SpaceX are on an individual level, they are ultimately closely related to the overall financial strength of the country. Morgan Stanley warns that if the "TSL" divergence continues to escalate, the stock price of TSL will face more severe fluctuations, but at the same time will create a large number of trading opportunities.

Written by: Long Yue

Source: Wall Street Journal

When the world's richest person clashes with the President of the United States on social media, the capital market senses unusual signals.

According to news from the Chasing Wind Trading Platform, Morgan Stanley's latest report reveals that this seemingly sudden "Tesla Competition" is actually a carefully designed strategy by Musk to achieve specific goals and gain attention. He believes that the fate of enterprises is ultimately closely related to the overall financial strength of the country. The market clearly underestimates Musk's determination and ability to withstand negative impacts. The drop in TSL stock price may just be a temporary "sacrifice."

This Wall Street giant warned investors that if Musk's differences with the president escalate, TSL's stock price will face more severe fluctuations, but at the same time, it will create a lot of trading opportunities. Analysts maintain their judgment of TSL as the "preferred stock" in the U.S. automotive sector, with a target price of $410, optimistic about its long-term prospects in the field of physical AI.

Musk's Strategic Layout

In a report released on June 10, Morgan Stanley's automotive team rarely included Musk's political actions in the analysis of the TSL investment framework.

Morgan Stanley analyst Adam Jonas pointed out that Musk's recent comments about the "dual deficit" in the U.S. (budget deficit and debt) are by no means impromptu. Last week's "Tesla vs. the World" was likely a carefully planned strategy by Musk to achieve specific goals, aimed at bringing relevant issues to the forefront of public follow.

Analysts interpret that the credit outlook and fiscal situation in the United States, including issues such as budget deficits and national debt, seem to have become the top priority for Tesla CEO. Morgan Stanley believes that Musk believes that no matter how successful companies like Tesla and SpaceX are on an individual level, these companies are ultimately closely related to the overall fiscal strength of the country.

Musk likened the U.S. sovereign credit to a "seafaring vessel," directly pointing out that the health of national finances is the ultimate anchor for corporate development.

$300 billion "arsenal": the underestimated influence

Morgan Stanley emphasized a key factor overlooked by the market in its report: Musk has assets ranging from $300 billion to $350 billion (including public and private assets). He can leverage a tiny portion of his assets to influence national policy discussions. Morgan Stanley posed a question:

How much follow and support can 5 billion or 10 billion dollars bring to the issues that Musk considers important?

This strong financial background gives Musk's every public statement an influence and sustainability that surpass ordinary entrepreneurs.

Analysts believe that history is telling investors that they may once again underestimate Musk's determination, as well as his resilience in enduring criticism and financial losses. Jonas reminds investors in the report to reflect on history:

Do you remember the collective skepticism of the market when Musk acquired a social media company (Twitter) a few years ago? Do you recall the frustration when he started to obviously channel resources into the political arena?

According to Morgan Stanley's analysis, the negative impact of Musk's involvement in political activities on TSL products and brand is a short-term "sacrifice," which will not come as a surprise to the company's management.

Trading Opportunities in Fluctuation

Morgan Stanley warns that if the confrontation between Musk and Trump continues to escalate, the fluctuation of TSL stock will further amplify, but the intense fluctuations will also create "a series of trading opportunities."

It is worth noting that Musk currently manages 5 companies (TSL, SpaceX, Boring, Neuralink, xAI), he controls 4 of them as private companies, but holds only 13% of the shares in the only publicly traded company TSL (excluding the controversial compensation plan).

Morgan Stanley believes that Tesla's expertise in manufacturing, data collection, robotics / physical AI, energy, supply chain, and infrastructure is more important than ever for ensuring that the United States remains competitive with other countries in the field of embodied AI.

Maintain "Preferred Stock" Rating

Despite facing political risks, Morgan Stanley still maintains TSL as the "top pick" in the US automotive sector, with a target price of $410 (representing a 33% upside from the closing price of $308.58 on June 9).

The investment bank stated that its overweight rating and price target are based on confidence in Tesla's capabilities in key areas of physical AI, including autonomous vehicles, humanoid robots, and other form factors, covering data, robotics, energy storage, computing, manufacturing, and space/communications/network/infrastructure. These growth and profit opportunities far exceed those of traditional electric vehicle businesses.

As various businesses continue to expand, Morgan Stanley expects that the timing for strategic cross-collaboration between different entities is approaching: Grok entering the automotive sector, SpaceX loading Cybertrucks, Optimus prosthetics for Neuralink patients, xAI training in Optimus and Cybercab, and so on, the possibilities are quite abundant.