Morgan Stanley Downgrades Tesla Amid Mixed Outlook on AI Valuation
Morgan Stanley's new analyst Andrew Percoco downgraded Tesla (TSLA) to Equal-weight from Overweight, citing overpriced AI ambitions. Despite the rating cut, the firm raised its price target to $425 from $410, reflecting cautious optimism.
"High expectations for Tesla's non-auto businesses are already priced in," Percoco noted, forecasting a volatile trading period ahead. The adjustment follows reduced EV adoption projections and intensifying global competition.
While November saw bearish pressure, Tesla shares recently rebounded. The divergence between rating and price target underscores Wall Street's struggle to value Tesla's dual identity as automaker and tech disruptor.