Wall Street Breaks Up with Ford, Writes "Love Letter" to Tesla Sending Shares +5%

Tesla’s stock is doing its best Bernie Sanders impression as it is once again, up nearly 5% today. 

After a brutal earnings report that had investors clutching their wallets and eating from the McDonald’s dollar menu over the weekend, the electric vehicle OG is back on the upswing, thanks to a love note from Wall Street.

Morgan Stanley has made a significant move by naming Tesla as its "top pick" in the U.S. auto sector, replacing Ford. This is big news because the brokerage firm believes Tesla’s energy business might soon outshine its car business. I guess Tesla is more than just a car company…

Despite popular belief, Elon doesn’t just make cars and post AI-generated videos on X making fun of Kamala Harris. Tesla is also poised to dominate the zero-emission vehicle credit market. I’m sure you’ve heard of carbon credits right? You know, the avenue that Tesla was able to make $1.79 billion from last year alone?

 Well, Morgan Stanley analysts predict that Tesla could capture a significant share of this market, bringing in even more revenue. They estimate Tesla might account for as much as half the credit sales, which is ginormous.

However, it’s not all smooth sailing. Tesla recently reported its lowest profit margin in over five years and missed Wall Street’s earnings targets for the second quarter. You’ve probably seen the headlines that they even had to offer discounts to boost vehicle sales amid falling demand, which took a toll on its margins.

Despite these challenges, some analysts remain optimistic about Tesla’s future. Piper Sandler’s Alexander Potter, for example, believes Tesla might have cracked the self-driving technology code. I’m not sure if he has any evidence to back up his belief or if he’s just YOLO’d on the stock. That said he encouraged investors to buy Tesla stock, confident that the company’s advancements in self-driving could significantly boost its value.

There are concerns, though. Tesla’s self-driving technology has faced regulatory scrutiny, particularly in China, due to safety concerns. The eagerly awaited robotaxi launch event has been delayed from August to October, giving Tesla more time to perfect its technology according to Elon. Although his haters are having a field day, saying “I told you so” every chance they get.

After last week’s earnings report, Tesla’s stock took a hit but is now recovering. Analysts are expressing renewed confidence in the company. Stifel’s Stephen Gengaro expects Tesla’s profit margins to stabilize soon, which he believes will support the stock’s growth. Morgan Stanley’s Adam Jonas, who has a high price target for Tesla, is betting on the company’s potential in the artificial intelligence and robotics market.

Not everyone is drinking the Tesla Kool-Aid. Bernstein’s Toni Sacconaghi has slapped a much lower price target on Tesla, pointing out the hurdles ahead. He’s basically saying, "Yeah, Tesla has big dreams, but it’s not all sunshine and rainbows." While Elon’s aiming for Mars, Toni’s here to remind us we’re still on Earth with all its bumps and bruises.

Stock.News has positions in Tesla, McDonald's and Ford.