Why Tesla shares rose 5% on Monday

Meanwhile, Morgan Stanley explained why Tesla is the top pick in the automotive sector.

Piper cited positive evaluations of Tesla's latest FSD software on the social media site “X,” and stated that subscription sales for the same software hold the key to the company's profits, and in order for electric vehicle (EV) manufacturers to increase profits again, more subscriptions must be sold. And it is said that the key is to develop and sell a new EV model (usually called model 2) of 30,000 dollars or less.

Mr. Piper believes that if the latter issue is successful, demand for FSD subscriptions will be unearthed, and if FSD succeeds in making FSD function, Tesla will be able to raise the monthly fee for FSD by 5 times to 500 dollars or more. Analysts expect both of these trends to converge around 2030.

By that time, if Tesla sells more cheap EVs, opportunities to sell expensive autonomous driving software will increase, and a high profit margin can be obtained from the latter, Piper says.

Morgan Stanley's Adam Jonas (longtime Tesla fan) quoted an article on TheFly.com and warned that while Tesla stock is a buy and predicts that it will rise 40% during this year, short-term expectations for FSD may be too high.

Both analysts may be right. Tesla may not have solved all of the FSD software problems yet, but by 2030, it will be possible to profit from the rapid increase in sales of the new EV “Model 2.”

So, should Tesla stock be bought? We might have to wait 6 years to find out.