Tesla shares rose 2% on Monday after Morgan Stanley reinstated the electric-vehicle maker as its top U.S. auto pick, saying the company's artificial intelligence and robotics efforts could power growth even as the mainstay car business stumbles.

Key Takeaways Tesla was named the "Top Pick" for U.S. auto firms by Morgan Stanley, which pointed to the EV maker's moves into AI and robotics.Morgan Stanley has an "overweight" rating and $430 price target for Tesla.

Morgan Stanley analyst Adam Jonas has backed struggling electric vehicle maker Tesla (TSLA) and indicated the stock could have as much as 50%

Morgan Stanley named Tesla (TSLA, Financial) its top automotive pick in the United States with a $430 price target which indicates shareholders could see more than 50% return on investment. Tesla stock has decreased by about 30% since the beginning of this year which makes the company an attractive investment opportunity as it moves away from traditional vehicle manufacturing.

Industry data showed Tesla sales fell 45% in Europe in January while overall EV sales jumped 37% in the region.

Tesla (NASDAQ:TSLA) is still a top pick at Morgan Stanley despite recent softening sales trends. Analyst Adam Jonas thinks Tesla's (NASDAQ:TSLA) softer auto deliveries are emblematic of a company in the transition from an automotive pure play to a highly diversified play on AI and robotics.