Elon Musk’s recent trip to China generated considerable excitement and a positive outlook from analysts at Morgan Stanley, who announced “his return” in a message to their clients on Monday.
The purpose of the trip was apparently to obtain authorization for Tesla’s (NASDAQ:) autonomous driving technology in China, but the consequences are broader, the financial institution commented.
According to analysts, Musk’s visit to China represents a strong signal of his new commitment to Tesla, thus calming investor concerns that arose following issues such as a Delaware judge’s disapproval of his compensation plan.
Morgan Stanley believes the unannounced nature of Musk’s trip to China sends a strong message of his commitment not only to Tesla, but also to the broader network of its businesses.
Furthermore, “the fact that Musk has received approval from the People’s Republic of China to introduce Full Self-Driving technology in the country appears to alleviate deep-seated concerns about Tesla’s profitability in China,” the investment bank said .
Analysts have also shed light on potential national security concerns related to Musk’s activities in China, considering his participation in SpaceX missions and collaborations with various US government agencies.
The intersection of artificial intelligence (AI) and robotics technology has also been highlighted in relation to Tesla. The company said: “The advancement of Large Language Models can significantly accelerate the training and development of robots, whether vehicle- or human-shaped.”
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In conclusion, Musk’s trip to China is perceived as a definitive statement with favorable implications for Tesla. Morgan Stanley reiterated its $310 price target and overweight rating on the electric vehicle leader.
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