Morgan Stanley: Institutional shareholders are pessimistic about Tesla's stock performance in the next six months.

Tesla's cumulative decline of nearly 25% so far this year has made investors pessimistic about its future performance.

An informal survey conducted by Morgan Stanley among institutional investors in Tesla found that many people are bearish on Tesla, with almost everyone believing that Tesla's stock price will perform poorly in the next 6 months, and most people expecting poor performance in the next 12 months.

Adam Jonas, the "Tesla fan" and Chief Auto Analyst at Morgan Stanley, stated in a report on Wednesday:

We just attended a Tesla investor lunch, which was the most bearish we have seen on Tesla... The reasons are understandable, with some doubting Tesla's sales growth this year and investors believing that Tesla is temporarily "excluded from the AI frenzy".

Jonas listed several reasons for the overall bearish sentiment among investors, with the biggest one being artificial intelligence and Tesla being excluded from the rise of AI-related tech stocks. Jonas believes that Elon Musk is "marginalizing" Tesla from the AI theme and actively diverting investors' attention to the deteriorating demand for electric vehicles.

And this may be the result of Musk's "loose talk". In mid-January, Musk tweeted a series of tweets stating, "No more than 25% voting rights, better off doing AI and robots outside of Tesla." Many people interpreted this as Musk threatening to spin off AI into a separate company, thereby depriving Tesla of its achievements in artificial intelligence.

Another major concern for investors is that revenue in 2024 may experience "zero growth".

Jonas stated that investors are questioning whether Tesla can achieve sales growth this year. Although Tesla delivered a record-breaking 484,507 vehicles in the fourth quarter, the management also warned that the growth rate of vehicle deliveries in 2024 may be significantly lower than that of 2023.

Despite the overall bearish sentiment among investors, Jonas, as a "Tesla fan", reiterated Morgan Stanley's "overweight" rating and $345 target price for Tesla, which implies a potential 80% upside for Tesla's stock price.

However, Jonas pointed out that in order to achieve such upside potential, Tesla must overcome the challenges faced by electric vehicle manufacturers as well as the entire automotive industry, such as rising interest rates, increasing costs, and oversupply, among others.