And a Wall Street analyst who covers one of the most closely watched stocks in the market just published a note saying the next quarter has to be different. The note comes from Morgan Stanley. The company it covers is Tesla.
Analyst Andrew Percoco has been on the Tesla account since longtime analyst Adam Jonas moved to the automotive side. His message on August 11 is direct. The long-term AI thesis is still intact.
But the numbers need to start showing up, according to Investing.com. Percoco kept his Equal Weight rating and $415 price target on Tesla. The stock was trading around $330 at the time of publication.
That puts the target roughly 26% above where the stock was sitting. The note says the second quarter earnings call did not change his long-term view. Tesla is positioned to lead in physical AI.
That part of the thesis is not in question. What has changed is the urgency around proof. Weaker gross margins, higher research and development spending, and extended free cash flow burn have "sharpened our and investors' focus on measurable progress across Robotaxi and Optimus," Percoco wrote.
Tesla sales rebound hides costly problem for investors Tesla record revenue masks cash burn, $1B SpaceX swing Elon Musk, Tesla and SpaceX face serious questions from investors Percoco took over Tesla coverage from Adam Jonas, who was the face of Morgan Stanley's bull case on the stock for years. Jonas moved to the automotive side of the firm. Percoco's August 11 note is his clearest statement yet on what Tesla needs to show to move the stock higher.
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