By Michael Elkins
Morgan Stanley reiterated an Overweight rating and $330.00 price target on Tesla (NASDAQ:TSLA) after conducting a survey of institutional investors and industry experts. The survey was distributed Friday, December 2nd through Morgan Stanley’s email distribution list, and was comprised of two multiple choice questions. Question 1: What is more likely, Apple (NASDAQ:AAPL) making a car or Tesla making a smartphone? Question 2: What is the potential significance of a smartphone to Tesla?
The survey was distributed at 11:03 EST on Friday, Dec 2nd, and received 30 responses. 2/3rds of the survey respondents believe Apple is more likely to make a car than Tesla is to make a phone. 40% of respondents believe making a smartphone would have a negative impact on Tesla, while 23% of respondents see a Tesla phone as positive, potentially being a tool in vertically integrating customers in a 'Tesla Ecosystem'.
Morgan Stanley analysts wrote in a note, “Followers of Elon Musk's plans to build a super app (X) may have thought about the potential for Tesla to make another move into hardware to help 'connect the dots' between the transport/energy/space/infrastructure/social media enterprises. However, this topic received greater attention from investors following Mr. Musk's comments about Twitter and Apple's App Store fees. Elon Musk subsequently met with Apple CEO Tim Cook and on Nov 23rd Tweeted: ‘We resolved the misunderstanding about Twitter potentially being removed from the App Store. Tim was clear that Apple never considered doing so.’”
It is Morgan Stanley's working assumption that Musk will continue to look for new ways to find natural areas of collaboration across Tesla, SpaceX, Boring Co, and Neuralink. The analysts believe that investors are wondering if there are still some missing components that could provide the “glue” across the platform as well as essential infrastructure to maintain a closed-loop ecosystem over which it can have greater autonomy.
Shares of TSLA are up 1.56% in pre-market trading on Tuesday.