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Cailianshe News, July 29 (Edited by Zhao Hao)In the early trading of U.S. stocks on Monday (July 29), Tesla's stock price once rose by more than 6%, reaching a high of $234.27 per share, and the increase has now narrowed to around 4.5%. Earlier in the day, top investment bank Morgan Stanley promoted it to the bank's "Top Pick" U.S. auto stock.

In the report, Morgan Stanley maintained its "overweight" rating on Tesla and its target price of $310 per share.

"With 40% upside to our $310 target, more manageable automotive expectations, and new drivers of value growth, Tesla replaces Ford Motor as our top pick for U.S. auto stocks."

The report specifically mentioned Tesla's effective cost-cutting and restructuring efforts, saying that this successfully brought the company's second-quarter results roughly in line with market expectations. Excluding restructuring costs and regulatory credits, Tesla's performance even exceeded Morgan Stanley's forecasts.

Morgan Stanley explained that Tesla has recognized more than $600 million in restructuring charges, which lowered its break-even point, allowing it to achieve positive cash flow even at 69% electric vehicle capacity utilization last quarter.

In addition, Tesla's strategic redirection of resources from car manufacturing also caught the attention of Morgan Stanley analysts. In contrast, "Ford management spent more time discussing electric vehicles in the Q2 earnings conference call, while Tesla did not."

Tesla's dominance in the zero-emission vehicle (ZEV) credit market is another key factor, Morgan Stanley wrote. The company reported revenue from ZEV credits of about $2,000 per vehicle, more than double recent levels.

Additionally, Morgan Stanley expects Tesla's position in the ZEV credit market to strengthen as legacy automakers scale back EV plans and the U.S. Environmental Protection Agency (EPA) tightens regulations.

Morgan Stanley also mentioned that Tesla's increased service revenue and strong position in the fast-growing energy storage sector are also considered factors supporting the company's prospects. Service and other revenue increased by 21% year-on-year, and the energy business may surpass the value of the automotive sector.

In addition, Morgan Stanley sees new opportunities in AI and autonomous driving applications, and Tesla is at the "center" of this theme, making its stock an attractive investment target.

At an event on Sunday, Musk revealed that the latest version of its FSD software, v12.5, is expected to be available on Cybertruck next month.

Shortly before press time, Musk revealed in another live broadcast event that "the new Roadster sports car is jointly developed by Tesla and SpaceX, can fly, and will be unveiled next year." When the car is released, it will become the first model to combine rocket engineering with Tesla's electric technology.