Tesla shares rise 2% as Morgan Stanley backs AI, robotics efforts with 'top pick' status

Tesla shares rose 2% on Monday after Morgan Stanley reinstated the electric-vehicle maker as its top U.S. auto pick, saying the company's artificial intelligence and robotics efforts could power growth even as the mainstay car business stumbles.

The note dated Sunday was the latest from analyst Adam Jonas, a longtime Tesla bull who has praised the company's push beyond autos as sales face pressure from high U.S. borrowing costs and fierce Chinese competition including from BYD.

Industry data showed Tesla sales fell 45% in Europe in January while overall EV sales jumped 37% in the region.

Jonas said recent setbacks, including Tesla's first annual deliveries drop in 2024, signaled its shift from an "automotive pure play to a highly diversified play on AI and robotic

Musk has said Tesla will roll out driverless ride-hailing services in California and Texas this year but provided no further details.

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