KGI Securities upgraded Tesla (NASDAQ:TSLA) to Outperform from Neutral, setting a price target of $335.00. The analysts praised Tesla's strong AI capabilities, especially their FSD Beta, which is showing significant improvement.

Elon Musk, CEO of Tesla, mentioned in a recent CNBC interview that Tesla's full self-driving (FSD) system will soon have a significant breakthrough similar to OpenAI's ChatGPT moment.

With a growing test fleet of over 400,000 vehicles, Tesla is surpassing competitors in self-driving capabilities. As Tesla's self-driving capabilities mature, the adoption rate of its FSD system is expected to increase, leading to higher revenue and margins in the medium to long term. Musk envisions an automotive business peak margin of 80% once fully autonomous self-driving is factored in.