Morgan Stanley Reiterates Tesla’s Overweight Rating with $310 Price Target, Highlights Potential in Edge Computing and AI Integration

Morgan Stanley Reiterates Overweight Rating for Tesla with $310 Price Target:
   – Analyst comments emphasize the convergence of automotive and smartphone technologies.
Car and Phone Integration:
   – Discussions with auto management and industry experts suggest that the car is increasingly becoming an extension of the phone, and vice versa. This integration is becoming more seamless.

Tesla’s Potential in Edge Computing:
   – Analysts have long discussed Tesla’s potential to expand into edge compute domains beyond the automotive sector.
Elon Musk on Device Development:
   – Following Apple’s WWDC, Tesla CEO Elon Musk indicated that developing a device integrating car and phone functions is a possibility.

Investment in AI and GenAI:
   – Musk’s investments in LLM/genAI efforts, such as ‘Grok,’ highlight the potential strategic and user experience overlaps between these technologies and Tesla’s offerings.

Automotive Supercomputing Relevance:
   – The relevance of supercomputing in automotive contexts is emphasized, particularly for cars capable of over-the-air (OTA) firmware updates, with significant battery storage and integrated liquid-cooled inference supercomputers.

Vehicle Compute Power and AI Applications:
   – Speculation arises about the possibility of phones leveraging vehicle compute power and battery supply to run AI applications.

Challenges of AI on Smartphones:
   – Edge computing and AI pose challenges such as battery life, thermal management, and latency, which complicate integrating powerful AI-driven applications with smartphones. Reports suggest OpenAI may develop a consumer device specifically for AI.

Smartphones as Car Keys:
   – Tesla owners commonly use their smartphones as primary keys to unlock and interact with their cars. The iPhone 15’s ‘action button’ could enhance this convenience further.

Cathie Wood and Ark Invest have announced an updated price target for Tesla ($TSLA) for 2029:

– **Base Case:** $2,600 per share, approximately an $8.3 trillion market cap
– **Bear Case:** $2,000 per share
– **Bull Case:** $3,100 per share

Morgan Stanley Reiterates Tesla's Overweight Rating with $310 Price Target, Highlights Potential in Edge Computing and AI Integration

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