APPLE GAINING ON TESLA: ANALYST

Tesla Inc. may be facing more competition from other tech giants, and an analyst that had been bullish on the firm is growing increasingly worried.

Morgan Stanley’s Adam Jonas, who downgraded Tesla in mid- May on risk of competition from the world’s largest tech companies, is reiterating his concerns after hearing Apple Inc. chief executive Tim Cook outline the iPhone maker’s plans.

“In a recent Bloomberg interview, Apple’s CEO made some of the most candid and direct statements on the company’s position on disrupting autos and transport,” Jonas said Wednesday. “Tesla investors must prepare for serious competition for talent and investment capital in this market.”

Cook said autonomous systems were a key focus of the firm, adding “it’s a core technology that we view as very important.”

Apple had been seeking to build its own car, but is now prioritizing the underlying technology, Bloomberg News reported.

Jonas feels this is merely the first step for Apple. “We believe Apple will eventually move beyond just software into designing a full car and/or launching a platform for third- party services and content over time. This is because Apple argues it is most successful when it vertically integrates in a market, controlling the hardware and software and creating a platform,” he concluded.

In January 2016, Jonas had a Tesla price target of US$450. He’s revised that to US$305.