Tesla Is Analysts’ Top Stock Pick for 2025: Musk’s Political Involvement Could ‘Accelerate’ EV Maker’s Move Beyond Cars – Tesla (NASDAQ:TSLA)

Tesla Inc. Tesla Morgan Stanley analysts led by Adam Jonas said in a report on electric vehicles (EVs) that this is the auto industry’s top stock in 2025.

Tesla’s top picks: Jonas’ report comes ahead of Tesla’s all-time high on Wednesday.

Jonas reiterated his overweight rating on Tesla and raised his price target to $400 from $310.

“Musk’s entry into politics expands investors’ thinking about Tesla’s fundamental prospects,” Jonas said of the Tesla CEO. Musk.

Tesla shares have risen since the 2024 presidential election. The big question is whether the move is temporary or the start of more measures to come.

“Will Tesla start to play a larger role in the U.S. renewable/autonomous industrial complex?” Jonas asked.

Jonas said customer conversations are seeing enthusiasm for artificial intelligence, data centers, renewable energy and robotics. Jonas added that it is important for these conversations to recognize the United States as a leader in these areas.

“Tesla, at least based on our discussions, has often been excluded from potential expression paths in portfolios.”

The total addressable market outside Tesla’s core auto market could expand. It likely won’t be included in the stock’s financial models, Jonas said.

Jonas said Tesla’s self-driving cars and more products could be at risk over time. But Musk’s close relationship with the president-elect Donald Trump could prove to be the key to unlocking value. Jonas added that government and industry partnerships could be key to the growth of electric vehicles, autonomous vehicles and robotics.

“Musk’s transformation from a political ‘outsider’ to having a say in potential policy could go some way to accelerating Tesla’s journey beyond cars.”

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Other car picks: Outside of Tesla, Jonas and his team see the future of electric and autonomous vehicles as “bumpy.”

“The U.S. election results have extended the ‘ICE is good’ trade a bit, but there will still be a need to continue to focus on the hidden value in the EV ecosystem in the second half of the year,” Jonas said.

Jonas upgrade General Motors General Motors Adjusted from “underweight” to “equal weight” and raised the target price from $46 to $54.

The analyst said smaller EV companies may be the biggest risk to the new administration. Trump promises to end electric vehicle credits.

“While Tesla is likely to achieve long-term share gains even with less regulatory support for EVs, smaller EV startups Rivian and Lucid may face greater production risks.”

Jonas has an equal weight rating Rivian Cars Rivigne and underweight rating sobriety group LCID.

The analysts added that Rivian is valued with the right risk/reward balance between trying to be profitable and trying to extract value from its technology.

price action: Tesla shares closed up 5.93% at $424.77 on Wednesday, hitting a record high of $424.88 during the trading session. Tesla’s stock price has risen 71% so far in 2024.

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Image created using artificial intelligence via Midjourney.