One Wall Street analyst thinks Tesla shares will hit $310. Is it a purchase?

Anticipation builds for adzehis (TSLA 3.91%) the upcoming “We, Robot” event on October 10. Investors are expecting to hear from CEO Elon Musk about the electric vehicle (EV) company’s next stage of growth, especially in light of recent weakness in electric vehicle demand.

The stock is trading lower after Tesla reported its production and delivery numbers for the third quarter. The company delivered 462,890 vehicles, in the range of 460,000 to 465,000 that analysts were expecting, but investors were likely hoping for better numbers.

There are a lot of mixed opinions on Wall Street about Tesla stock, but Morgan Stanley analyst Adam Jonas takes a long view of the company’s prospects. He rates the stock with an Overweight (Buy) rating and a $310 price target, representing an upside of about 27% from current levels.

Why Buy Tesla Stock?

The analyst pointed out that more than 80% of Tesla’s expected revenue in 2024 will come from electric vehicles, but over time, the business could change. The company is making a big push into artificial intelligence (AI) to lay the groundwork for a robotaxi service that could one day contribute a significant portion of Tesla’s revenue and profit. As investors get a clearer picture of Musk’s vision for Tesla in robotics and other AI initiatives, the stock could rise.

Indeed, Musk calls Tesla an AI and robotics company, not a car company. The analyst referred to the relationship between Tesla and xAI (also led by Musk), which developed the Grok conversational AI model. Musk acknowledged on the Q2 earnings call that Tesla learned a lot from xAI.

Tesla’s upcoming event should provide a clearer picture of the company’s future in AI, which Jonas apparently sees as a catalyst for the stock price. However, the stock’s performance through 2025 will still be heavily influenced by demand for electric vehicles, as that is still Tesla’s core business right now.