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Analyst: “Longer-term vectors that drive the stock’s value” haven’t changed for Tesla

A longtime Tesla bull on yesterday’s market meshugas.

6/6/25 12:39PM

Longtime Tesla bull Adam Jonas of Morgan Stanley is out with a note putting a characteristically optimistic spin on yesterday’s high-profile feud between Elon Musk and the president. He writes:

“1. Credits. We do not believe the phasing out of EV tax credits from the BBB (Big Beautiful Bill) is material to the long term outlook for TSLA.
2. Distraction. We believe Tesla’s recent 50% rally was driven primarily by hopes that Elon Musk would refocus time and attention on Tesla.
3. Cars. While the situation remains fluid, we believe the disagreement will not help Tesla demand but could potentially (temporarily) alienate multiple sides of the political spectrum.
4. Bigger picture. While emotions are running high, we are not convinced the longer-term vectors that drive the stock’s value have changed here. AI leadership, autonomy/robotics, manufacturing, supply chain re-architecture, renewable power, critical infrastructure... Tesla still holds so many valuable cards that are largely apolitical, in our opinion.
5. Volatility. When putting our trading cap on, we have higher conviction in near-term volatility than near-term direction. We reiterate our $410 price target but are prepared for the stock to give up more than just the 4 weeks of performance it has sacrificed so far.”

True-to-form Jonas remains one of the most optimistic Wall Street analysts on the company, with a $410 share price on the stock, about a 35% premium to where the stock was trading midday Friday and far higher than the Wall Street consensus price target of $308.

Jonas writes that his optimism is based on his “belief that Tesla’s capabilities in key areas of physical AI (autonomous vehicles, humanoids and other form factors) including data, robotics, energy storage, compute, manufacturing and space/comms/networking/infrastructure offer growth and margin opportunities that greatly exceed those of the traditional EV business,” adding that “the challenges facing Tesla’s current business are widely reported and well known, while the opportunities in the future business are potentially greatly underestimated.”

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AI server cluster maker Penguin Solutions takes flight

Small-cap AI server cluster maker Penguin Solutions surged Thursday after posting better-than-expected Q2 revenue and profit numbers Wednesday after the close, along with an increase in full-year sales and profit guidance.

The company, which was known as Smart Global Holdings until July 2024, has positioned itself as a provider of “end-to-end AI infrastructure solutions.”

Its Advanced Computing division designs and sells computers, cabling, and cooling systems, the server racks and clusters of racks AI data centers need. Its other main division sells flash and DRAM memory products.

It’s a pretty small company, with a fully diluted market cap of just over $1 billion and roughly 2,900 employees, according to FactSet.

The stock is volatile. Penguin dove during last year’s tariff tantrum that followed “Liberation Day” in April. Then it turned tail and doubled through early October amid a surge of call options activity, which tends to reflect retail interest. From the October peak, it then plunged by about 50%, before Thursday’s renaissance.

For what it’s worth, call options activity in Penguin is pretty busy today, too — relatively speaking — with roughly 2,625 traded as of 1:15 p.m. ET. That’s the most since early January, when the company last reported quarterly numbers. The average volume over the previous 25 trading sessions is about 325 calls a day, FactSet data shows.

Penguin Solutions Stock Takes Off On AI Bolstered Outlook

The company, which was known as Smart Global Holdings until July 2024, has positioned itself as a provider of “end-to-end AI infrastructure solutions.”

It’s a pretty small company, with a fully diluted market cap of just over $1 billion and roughly 2,900 employees, according to FactSet.

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Momentum returns to optics stocks as the release valve for AI optimism

Potentially imminent end to the war? Buy optics stocks.

Maybe not? Buy optics stocks anyway.

Effectively all the juice left in the AI trade is coming from optics (and memory) stocks. And the latter group is taking a bit of a breather today while the former continues to surge.

Shares of Ciena Corp., Lumentum, and Coherent are building on recent big gains and among the biggest gainers in the S&P 500 near midday, while Applied Optoelectronics is also surging on Thursday.

These companies all provide solutions that help information move around in data centers, and thus are key beneficiaries of the aggressive capex plans of hyperscalers. Nvidia has invested $2 billion apiece in Coherent and Lumentum in deals that also include purchase commitments.

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Space stocks rip during a topsy-turvy day for the equity market

Satellite-services-from-space stocks surged Thursday after reports that Amazon is in talks to buy Globalstar, which provides voice and connectivity services from its satellite network. It also can’t hurt that the general mood around space is ebullient, following the successful launch of Artemis II on Thursday.

Planet Labs and ViaSat also soared on the news.

The gains for EchoStar — seen as a backdoor play at pre-IPO SpaceX exposure — and Rocket Lab were more muted, perhaps because a deep-pocketed competitor like Jeff Bezos getting serious about space services could complicate the plans of the two largest commercial space launch companies.

Rocket Lab and SpaceX see launch services as key to their aspirations of being major providers of voice and data services from low-Earth orbit satellites.

Tesla CEO Elon Musk’s SpaceX is the dominant provider of such services, and the early rumors on the company’s planned IPO — expected to be the largest ever — suggest the market is very excited about the prospects for the industry.

Elsewhere in the space stock world, Intuitive Machines — a maker of space infrastructure that provides services to NASA for lunar missions — also rose.

Globalstar surges after FT reports that Amazon is in talks to buy the satellite group

Rocket Lab and SpaceX see launch services as key to their aspirations of being major providers of voice and data services from low-Earth orbit satellites.

Elsewhere in the space stock world, Intuitive Machines — a maker of space infrastructure that provides services to NASA for lunar missions — also rose.

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Balancing balls of different sizes on pink seesaws creating equilibrium