Morgan Stanley Stays Bullish on Tesla (TSLA), Cites China EV Pressure

We recently published a list of 12 AI Stocks Making Waves on Wall Street Today. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other AI stocks that are making waves on Wall Street today.

The United States recently issued guidance threatening companies not to use advanced computer chips from China, including Huawei’s Ascend AI chips. However, China has now urged the country to “immediately correct its wrongdoings” and stop “discriminatory” measures against it.

A spokesperson for China’s Ministry of Commerce has said that the United States has abused its export control measures. He said that the country has imposed stricter restrictions on Chinese chip products based on unfounded allegations, further explaining how the said restrictions contain discriminatory measures and tend to distort the market.

The U.S. Commerce Department had issued the guidance last week, with its Bureau of Industry and Security stating that “these chips were likely developed or produced in violation of U.S. export controls.”

“The U.S. has been abusing export control measures, imposing stricter restrictions on Chinese chip products under unfounded accusations… China firmly opposes this… Trying to trip others won’t make oneself run faster.”

-The Chinese Ministry

Opposing the unilateral bullying from the US’s end, the Chinese spokesperson said that the restrictions have infringed upon the legitimate rights and interests of Chinese companies. The country has been accused of undermining the preliminary trade agreement reached in Geneva, Switzerland.

The spokesperson further urged the country to work with China to jointly safeguard the consensus concluded in the Geneva talks.

“If the United States continues to cause China substantive harm, China will take resolute measures to safeguard its legitimate rights and interests.”

For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024.

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Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 126

Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives. On May 20, Morgan Stanley reiterated the stock as “Overweight” with a price target of $410. The firm said the market may have been overly optimistic about Tesla’s automotive business, failing to account for competition, particularly from China. The firm highlighted Chinese electric vehicle (EV) manufacturers, particularly Xiaomi’s latest offerings in the EV market. It further noted how competition is going to influence international markets and is a key driving factor behind Tesla’s strategic focus on autonomy.

“We find market expectations around Tesla’s near-term automotive business remain too high and do not fully reflect the quantum of incremental capacity and competition coming out of China, ultimately having an impact in international markets.”

Overall, TSLA ranks 6th on our list of AI stocks that are making waves on Wall Street today. While we acknowledge the potential of TSLA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk.  If you are looking for an AI stock that is more promising than TSLA and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.