12:09 PM EDT, 04/24/2024 (MT Newswires) -- Tesla's (TSLA) Q1 analyst call showed that Chief Executive Elon Musk remains committed to the company's AI efforts, Morgan Stanley said in a report Wednesday.

"The 1Q conference call did not feed into the widely held bear view that Elon Musk could be shifting the AI emphasis away from Tesla towards other non-Tesla entities under his voting control," Morgan Stanley said. "In fact, quite a good deal of the investor letter and conference call was devoted to the significant ramp up of computational horsepower."

On growth in deliveries, despite Musk's claim that he expects higher sales in 2024, the Wall Street firm said that "we believe full year sales growth may require help from the market as well as seamless execution on cheaper new model introductions."

The strategy shift to a more conservative approach reflects potential challenges in the Chinese market, Morgan Stanley said. This approach, focusing on incremental improvements rather than major leaps, reflects Tesla's recognition of competitive pressures and its emphasis on autonomy, the report said.

Morgan Stanley has an overweight rating on Tesla with a price target of $310.

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