- Elon Musk's public feud with Donald Trump appears strategically timed to highlight fiscal concerns, according to Morgan Stanley.
- Tesla shares plunged 15% during the conflict but showed signs of recovery by June 7, 2025.
- Analysts maintain long-term bullish outlook on Tesla's AI and robotics potential despite political turbulence.
A Calculated Controversy?
Morgan Stanley analysts suggest Elon Musk's very public spat with former President Donald Trump in early June 2025 may have been more strategic than impulsive. The clash, which saw Musk make inflammatory posts on X before deleting them, coincided with Trump's announcement of 50% steel tariffs that directly impact Tesla's supply chain costs.
"This appears to be a calculated strategy to draw attention to U.S. fiscal issues," the firm noted in its analysis, while acknowledging the potential for temporary brand damage. The financial impact was immediate - Tesla's market value sank $153 billion during the feud, knocking it out of the $1 trillion club.
Market Whiplash
Tesla shares became a rollercoaster in the first week of June, plunging approximately 15% before staging a partial recovery. By June 7, they were among the S&P 500's biggest gainers, though still down significantly from pre-controversy levels.
"Investors may be underestimating Musk's willingness to weather criticism," Morgan Stanley analysts wrote, maintaining their Overweight rating and $410 price target. They highlighted Tesla's leadership in AI and robotics as durable value drivers less susceptible to political winds.
The Road Ahead
While Oppenheimer analysts expressed concerns about brand repair ahead of Tesla's crucial robotaxi launch, Morgan Stanley urged investors to focus on long-term growth areas like autonomous driving and energy storage. The firm noted that Musk's political engagement is inseparable from his role at Tesla, suggesting future volatility may be inevitable as business and politics become increasingly entangled.