Tesla’s Revival: Adam Jonas on Elon Musk’s Resurgence and the AI-Robotics Nexus

Adam Jonas of Morgan Stanley has released a new note on Tesla titled “HE’S BACK, reiterating an “Overweight” rating and a price target of $320, following Elon Musk’s unannounced visit to China.

Musk’s visit is seen as significant beyond just seeking approval for self-driving technology in China. Jonas emphasizes that Musk’s actions, such as this trip, convey a clear message of commitment to Tesla.

Jonas addresses concerns about Musk’s dedication to Tesla, particularly in light of his involvement with other ventures, since his compensation package was rejected by a Delaware judge.

The analyst highlights the symbolic importance of Musk’s engagement with Chinese officials, suggesting that it could alleviate worries about Tesla’s profitability in China, which reportedly contributes up to half of Tesla’s profits.

Jonas also delves into the intersection of artificial intelligence (AI) and robotics, stating that the ongoing revolution in Large Language Models (LLM) and General AI (Gen AI) is still in its early stages in terms of merging with robotics.

Traditionally, LLM and robotics were viewed as separate fields, but Jonas suggests there’s significant overlap in how advancements in LLM can expedite the training and learning processes of robots, whether they’re shaped like cars or humanoid.

He metaphorically describes the relationship between AI and robotics, likening it to the AI “brain” searching for its robotic “body,” with the body serving as the vessel for the AI’s “soul.” This metaphor underscores the symbiotic relationship between AI and robotics in their development and evolution.