Fundamentals no longer matter? Morgan Stanley: Investors are more concerned about Tesla's "AI narrative" than electric vehicles

Elon Musk has mentioned many times before that Tesla is an artificial intelligence + robotics company, not just a car company. Currently, as the decline in the electric vehicle business becomes a consensus, investors are paying more attention to Tesla's "AI narrative". Last weekend, analysts from Morgan Stanley such as Adam Jonas released a Tesla investor survey report. The results show that 68% of investors see AI as the main driver of Tesla's stock price in the next year, with only 33% leaning towards electric vehicles. The report also points out that investors' views on Tesla's stock performance in the next 12 months are almost "evenly distributed", highlighting the market's uncertainty about the company's prospects. This survey was conducted on July 17th and received 137 responses within 24 hours. Although the sample size is limited, it still reflects a significant shift in investor sentiment. It is worth noting that Morgan Stanley also mentioned that now is the time to consider Tesla's "Master Plan Part Deux". Last month, Morgan Stanley released a report stating that the fourth chapter of the Master Plan is expected to be supported by artificial intelligence, robotics, and hybrid computing technologies, linking Tesla with Musk's other ventures (including SpaceX, Starlink, X, and xAI), for which investors should be prepared. They believe that the significance of this new plan may change due to the results of the U.S. election. It was previously widely expected that after Trump returned to the White House, the U.S. government would implement a series of economic stimulus policies, benefiting Tesla and other U.S. domestic companies. However, with Biden's withdrawal, the direction of the election began to change. Nevertheless, Morgan Stanley remains optimistic about Tesla, giving a target price of $310, 26% higher than the current price. This valuation takes into account Tesla's automotive business, mobility services, and other business segments. Specifically: Core automotive business: $56 per share Tesla Mobility: $61 per share Third-party supplier business: $40 per share Energy business: $50 per share Insurance business: $5 per share Network services: $97 per share The report also suggests that investors' valuation logic for Tesla is undergoing a transformation—from a traditional electric vehicle manufacturer to a tech company. However, Morgan Stanley warns that this shift also brings new uncertainties, especially if the market fails to fully recognize the potential of Tesla's AI-related business Tesla is set to announce its Q2 financial report after the US stock market closes on Tuesday, July 23 local time. Wall Street expects Tesla's Q2 revenue to slightly decrease year-on-year, with earnings per share declining by about 30%. Considering Tesla's sales growth is slowing down, the market currently anticipates that its performance for this year "will not be very ideal." At that time, the market will focus on the latest news of the affordable Model 2, the release date of Robotaxi, and the adoption rate of FSD technology