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Morgan Stanley analysts studied Tesla’s humanoid robot Optimus and how AI is transforming robotics. They concluded that the capabilities of humanoids will be “far bigger and faster adopting than autonomous cars.”

“AI is driving transformational change in robotics,” analysts at the firm proclaimed. “We believe the humanoids opportunity is far bigger and faster adopting than autonomous cars and will see a greater quantum of capital behind it. Tesla is at the epicenter of the theme. Investors may need to add new tabs to their excel models.”

Analysts believe that it is human-like robots that will be important in our world since the world has already been created for people and by them and adapted to them.

Morgan Stanley stated that against the backdrop of a theoretical $30 trillion global labor market, their US TAM model forecasts a humanoid population of 8 million units by 2040 ($357 billion wage impact) and 63 million units by 2050 ($3 trillion wage impact), according to investing.com.

At Tesla’s annual shareholder meeting in 2024, CEO Elon Musk said he believes humanoids will eventually outnumber humans by two-to-one or more. “I think the ratio of humanoid robots to humans will probably be at least two-to-one, something like that,” Musk said. “One-to-one for sure. So, which means like somewhere on the order of 10 billion humanoid robots. Maybe, maybe, maybe 20 billion or 30 billion.”

Given the huge market, analysts say Tesla is uniquely positioned and positioned to exploit and benefit from humanoids. Morgan Stanley highlights three key factors supporting the Tesla “AI Enabler” case:

1. Massive data set that is both high quality (edge ​​cases from unique driving situations) and continuously growing at an accelerating pace (constantly collecting data from increasing miles driven across growing car parc).
2. Massive global manufacturing footprint with labor-intensive processes that are relatively simple to replicate via automation, which creates the opportunity to “observe” and collect data from its own workers to train bots (and continuously iterate upon that pattern).
3. Experience in vertically integrating key hardware and software infrastructure.

Morgan Stanley’s current target price for Tesla shares is $310. It consists of estimates for Tesla derived from the company’s auto (hardware), auto-related (software, services), and energy-related businesses. Analysts have not yet included the potential of humanoid robots in Tesla’s revenue streams.