Tesla Stock down 3.39% after Morgan Stanley Reevaluation
Morgan Stanley is telling investors to wait on buying in to Tesla stock in anticipation of a price drop.
Quick overview
- Morgan Stanley advises investors to hold off on buying Tesla stock, leading to a 3.39% drop in TSLA shares.
- Concerns about the future of AI and robotics, which are crucial to Tesla's business model, are affecting investor confidence.
- Tesla's stock has seen a decline from a recent high of $455 to around $440, with expectations of further decreases.
- The company's profits are projected to fall, and the average stock price is estimated at $388, indicating potential challenges ahead.
Morgan Stanley says to “hold” on Tesla (TSLA) stock for now, and the price of TSLA fell 3.39% on Monday as a result and is declining further Tuesday morning.
Financial services firm Morgan Stanley is telling investors to wait to buy Tesla stock after considering the electric carmaker’s AI and robotics plans for the future. That stock dipped after the evaluation and continued to fall as investors began losing their confidence in Elon Musk’s company.
In recent weeks, Tesla stock has been performing very well, moving upward from $391 per share in late November to a December high of $455 last week. The stock price is down to $440 now and dropping as investors fear what the new assessment means for the company.
Feeding the AI Market Fears
This evaluation feeds into the concerns that investors have been having about the artificial intelligence market and how it may collapse sometime soon. Elon Musk and Tesla have big plans for AI and robotics in the future, and the company has invested tremendously in these arms of its business.
AI is integral to Tesla’s success, powering its self-driving cars and robotaxi service and is to be used in the upcoming Optimus robotic products that Tesla is producing now. The market is not as hopeful about the future of AI as Musk is, though, and it seems like Morgan Stanley is not wildly optimistic about the technology and its promise of future gains compared to Musk either.
Tesla’s profits have dropped tremendously in 2025. The company’s electronic vehicle arm is suffering as sales drop around the world, and North American EV sales for all automakers are expected to fall further in 2026 (around 12%). Tesla has been able to sidestep a lot of the criticism about declining sales as they focus on robotics, self-driving cars, and AI plans.
If they can convince investors to look to the future, then investors will not worry as much about present sales concerns. The Morgan Stanley evaluation expects Tesla profits to slip, however, and it sees rough days ahead for the automaker.
The average stock price is around $388 for this evaluation, well below the current stock price. Tesla’s value is expected to fall in the coming weeks, but Musk will likely work hard to keep stock value high and ensure profits for the company so that he can meet the requirements for his trillion dollar payout deal that tells has agreed to give him.
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