It is well-known that Apple is interested in joining the EV race, with the company slated to move forward with its prospective Apple Car at some point in the future, thereby encroaching on Elon Musk‘s turf.
But turn that paradigm around and Morgan Stanley’s Adam Jonas finds an interesting result.
“What is far less contemplated is the potential, however remote, for Tesla (NASDAQ:TSLA) (or another Elon Musk company) to explore the possibility of entering the smartphone market,” Jonas said. “Followers of Elon Musk’s plans to build a super app (X) may have thought about the potential for Tesla to make another move into hardware to help ‘connect the dots’ between the transport/energy/space/infrastructure/social media enterprises.”
Such talk was given more credence recently following the tiff between Apple and Musk over Twitter and Apple’s App Store fees (resolved, for now…).
In any case, considering Musk’s business interests already encompass all those noted above, would this be a good idea? Jonas wanted to find opinions on the matter and undertook a survey amongst institutional investors.
There were two main questions: 1) What is more likely, Apple making a car or Tesla making a smartphone? and 2) What is the potential significance of a smartphone to Tesla?
For the former, 2/3rds said Apple is “more likely to make a car than Tesla is to make a phone.”
As for the latter, 40% believe entering the smartphone market would have a “negative impact on Tesla,” while 23% think a Tesla phone would be a “positive” development, with the potential to be a tool that will help in “vertically integrating customers in a ‘Tesla Ecosystem.’
What does Jonas think? While he doesn’t offer an equivocal answer on the subject, he thinks Tesla’s CEO will “look for new ways to find natural areas of collaboration across Tesla, SpaceX, Boring Co, Neuralink.”
Smartphone or not, Jonas remains a TSLA bull, and reiterated an Overweight (i.e., Buy) rating to go along with a $330 price target, suggesting shares will rise by a robust 110% in the year ahead. (To watch Jonas’s track record, click here)
Turning now to the rest of the analyst community, where the view is that TSLA stock is a Moderate Buy, a rating based on 19 Buys, 8 Holds and 2 Sells. According to the $302.81 average target, investors will be sitting on returns of 92% a year from now. (See Tesla stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
