Tesla's (TSLA) acceleration in capital spending is a "necessary" investment to secure its leadership in autonomy and robotics, even as the heavier outlay deepens the company's cash burn. Morgan Stanley said Thursday in a report.
Tesla remains positioned to lead in physical AI, though the return on investment from a prolonged spending cycle will require "patience and consistent execution," the report said.
Robotaxi commentary during the company's Q2 earnings call was upbeat, though the timing of meaningful returns remains uncertain, Morgan Stanley said. Cybercab manufacturing targets are now aligned with the projected growth rate of unsupervised miles, the report said.
Morgan Stanley cut its price target on Tesla stock to $400 from $417 and maintained its equalweight rating.
Price: $321.90, Change: $-52.11, Percent Change: -13.93%