11:28 AM EST, 03/03/2025 (MT Newswires) -- Tesla (TSLA) was reinstated as a top pick in US autos by Morgan Stanley, with shares down 30% year-to-date due to a "buyer's strike" along with delivery declines creating an attractive entry point, Morgan Stanley said in a note emailed Monday.

The company is evolving from an automotive "pure play" into a diversified company focused on artificial intelligence and robotics, and this transformation is expected to expand Tesla' total addressable market beyond traditional car sales, according to the note.

Morgan Stanley said that several growth avenues support Tesla's long-term potential, including a "material competitive advantage" in embodied AI, recurring services revenue, energy storage and reinvigorated US manufacturing edge.

The firm said Tesla's work on humanoid robots could capture a substantial share of the US labor market and this might be even larger than autonomous vehicles.

Morgan Stanley has an overweight rating on Tesla's stock with a price target of $430.

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