AI Developments Boost Tesla's Embodied AI Prospects
Recent breakthroughs by Chinese AI startup DeepSeek have ignited market interest in AI and its potential implications. Tesla (TSLA) is well-positioned to benefit from this renewed focus.
Embodied AI as a Competitive Advantage
Morgan Stanley's Adam Jonas believes that "embodied AI" – AI integrated into physical objects – will play a crucial role in the AI race. Tesla's self-driving, full self-driving, and Robotaxi capabilities leverage AI advancements to enhance the capabilities of its millions of vehicles.
Growing Demand for Visual Data
Jonas emphasizes the importance of visual data for training embodied AI models. Tesla's vast data collection capabilities in this area grant it a competitive advantage.
Bullish Outlook on Optimus Robot
Tesla and CEO Elon Musk are optimistic about the prospects of their Optimus robot, powered by embodied AI. Jonas predicts half a million Optimus robots in service by 2027, representing a potential trillion-dollar market.
National Security Implications
Jonas highlights the national security implications of embodied AI, particularly in military applications. This could drive government spending and investor interest in the field.
Analyst Recommendation
Morgan Stanley maintains its Top Pick rating for Tesla in the automotive space, with a price target of $430.