Stifel has initiated coverage of Tesla (TSLA.US) with a “buy” rating and a target price of $265. The investment bank noted that the electric auto manufacturer benefits from a large global supply chain, as well as the cost advantage and strong profit margins it gains from internal manufacturing support.

Stephen Gengaro of Stifel and his team believe that Tesla will achieve strong multi-year growth over the next three years due to the upcoming improvements to the Model 3 and Model Y models and the launch of the next generation Model 2. Gengaro also believes that Tesla's full self-driving plan can add value through sales, licensing, and potential RoboTaxi opportunities. The recent wave of earnings downgrades is believed to have alleviated pressure on Tesla's stock.

In addition to electric vehicles, there is also the energy business.

In addition to the bullish outlook for the electric vehicle business, Tesla's energy business has recently received another bullish view from a major Wall Street bank. Morgan Stanley believes that due to the demand for electricity brought about by the AI boom, Tesla (TSLA.US) will become a more important player in the US energy market. Morgan Stanley values Tesla's energy business at $130 billion, equivalent to $36 per share, and has a “shareholding” rating with a target price of $310.

Morgan Stanley's analysis shows that by 2030, the electricity consumption of US data centers may be equivalent to the electricity consumption of 150 million electric vehicles. In other words, from 2023 to 2027, the expected growth of US data center electricity consumption is equivalent to adding 59 million electric vehicles on US roads or increasing the number of vehicles in service by 21%. Tesla is considered to have a unique advantage that can benefit from investment in the US power grid. The huge demand for AI processing and data centers has accelerated this investment.

Morgan Stanley analysts said: "We predict that the growth rate of energy storage business (compound annual growth rate from 2020 to 2040 is 29%) will be faster than that of solar energy business (compound annual growth rate from 2020 to 2040 is 24%) and the profit margin will be higher than that of the core auto business, with a turning point in 2023."

Assuming an operating margin of 16.2% and a tax rate of 25%, Morgan Stanley analysts believe that by 2030, Tesla's energy business may increase its after-tax net operating profit (NOPAT) by $3.95 billion, with earnings per share exceeding $1. Although Tesla is gradually becoming a direct competitor of Fluence Energy (FLNC.US), the growth rate of the energy storage market is strong enough to benefit both companies.