Tesla is best positioned to benefit from the transformation of U.S. manufacturing by artificial intelligence merging with physical machines, according to Morgan Stanley. The U.S. manufacturing base has declined from 28% of the U.S. economy in 1953 to just 10% today, an all-time low. But AI is tailwind for domestic manufacturing that will bring down costs, analysts led by Adam Jonas told clients in a Wednesday note. “The opportunity is compounded by 25 years of US Manufacturing under-investment creating conditions for growth and exciting new alpha-generating ideas,” Jonas said. Tesla is the most diversified company developing physical AI or intelligent machines, the analyst said. Shares of the electric vehicle manufacturer have tumbled more than 17% this year. But Morgan Stanley has reiterated its buy rating with a $430 stock price target, suggesting a 31% increase from current levels. The bank has a bull case in which shares more than double to $800. “A few years into the not-too-distant future will reveal machines that do different things, that are designed, supplied and manufactured differently … spawning business models and industry structures that may bear precious little resemblance to the legacy we experience today,” Jonas said.
