John Deo

Tesla's Stock Decline: A Buying Opportunity or Cause for Concern?

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    Posted by John Deo Mar 12 - Filed in General - #financialmodelingprep  - 6 views

    Tesla Inc. (NASDAQ: TSLA) has experienced a sharp decline in its stock price, falling 50% from December highs and down 45% year-to-date. Despite these losses, Morgan Stanley views the downturn as a buying opportunity, citing Tesla’s potential as an "embodied AI compounder" poised for long-term growth.

    Why Tesla Shares Dropped

    1. Disappointing Delivery Data

    • Tesla’s vehicle deliveries have fallen short of expectations, attributed to:
      • Increased competition in the EV market.
      • An aging vehicle lineup with fewer recent updates.
      • A buyers' strike due to negative sentiment and anticipation of upcoming product releases.

    2. Weak European and Chinese Sales

    • European Sales: Tesla’s January sales fell 45% year-over-year, despite overall European car sales rising 37%.
    • China Sales: Tesla’s weekly order estimates for late February to early March dropped to 11-13K units — down from 15-17K units the prior week.

    Morgan Stanley's Outlook

    Despite the weak sales data, Morgan Stanley emphasizes Tesla's potential as a leader in AI-driven innovation and robotics:

    Key Catalysts to Watch

    1. Robotaxi Unveiling (June-August 2025): Tesla is expected to showcase its autonomous taxi service, which could boost investor confidence.
    2. AI/Humanoid Day: Tesla is set to highlight progress on its Optimus humanoid robot, strengthening its position in embodied AI technology.

    Stock Price Predictions

    • Bear Case: Tesla could fall to $200 in a worst-case scenario.
    • Bull Case: Optimistic projections suggest a potential climb to $800 within 12 months.

    Investment Takeaway

    Morgan Stanley maintains Tesla as its “top pick” in the U.S. auto sector, reinforcing confidence in the company’s long-term value as an AI innovation leader. While short-term volatility may persist, Tesla’s advancements in autonomous driving, robotics, and energy solutions could fuel substantial growth.

    Monitor Tesla’s Performance

    For real-time financial data and market insights, the Company Profile API and Stock Price API provide comprehensive updates on Tesla's valuation, revenue, and performance metrics.