The investment bank said that after Tesla announced its second-quarter earnings report, it still listed it as one of the key recommended targets. The long-term outlook is promising despite the EV maker missing market expectations in its quarterly results, delivering both revenue and earnings "misses", with revenue from its automotive business falling 16% year-over-year to $16.7 billion.
Morgan Stanley analyst Adam Jonas, as a famous "Tesla bull" on Wall Street, also made an adjustment to the company's fiscal year earnings estimate this time-cutting its fiscal 2025 earnings per share (EPS) estimate by 14%. It explained that the decline in delivery volume and the increase in operating expenses were the main reasons for this adjustment.
Jonas noted in the report: "The performance in the second quarter was slightly better than expected, with free cash flow close to breakeven. Tesla is in a critical phase of its transition from a traditional manufacturer to a fully autonomous company, while also dealing with slowing sales, the removal of EV incentives, tariff pressure and continued investment in new businesses that can't bring profits for a long time."
As an automotive and clean energy company, Tesla is actively applying artificial intelligence to autonomous driving technology and robotics projects, and the AI strategy has become one of the core pillars of the company's long-term growth.
However, the report also reminds investors that although TSLA has great potential, some AI concept stocks have higher short-term upside and lower downside risks. Finally, the report recommends paying attention to those high-quality AI stocks that are obviously undervalued and are expected to benefit from the trend of tariff policy and manufacturing onshoring in the Trump era, saying that readers can consult their free reports to get the list of the best short-term AI investment targets.
