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.

Tesla shares rose 2% on Monday as Morgan Stanley analyst Adam Jonas said he sees shares of the EV giant rising to $430 as it diversifies into artificial intelligence and robotics.

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.