Investors should buy the dip in Tesla as the stock will rebound sharply, Credit Suisse says

• Investors should buy the dip in Tesla as the stock is set to rebound, Credit Suisse has said.
• The bank's analysts said the company is leading the electric-vehicle race and now looks cheap.

Tesla stock is looking cheap after the major market sell-off and investors should buy the dip, Credit Suisse analysts said in a note Monday.

"With the market disproportionately punishing growth stocks in the past month, we believe an attractive entry point has emerged for Tesla," analysts Dan Levy and Trevor Young wrote.

They upgraded their official rating on the stock to "outperform" and stuck with their forecast that Tesla would rise more than 10% to $1,025 over the next 12 months.

Tesla was up 9.06% on Monday morning to $923.02 after Cathie Wood's Ark Invest company snapped up some shares last week and as technology stocks broadly rebounded. Its gain cut its year-to-date drop to around 13%.

Stocks have fallen sharply in 2022 as investors have prepared for the Federal Reserve to turn off the stimulus taps and raise interest rates in an effort to tame inflation.

But Credit Suisse's analysts said Monday that the outlook for Tesla remained bright. They said Elon Musk's company is at the heart of the electric-vehicle revolution, and is leading the way with its products.

Read more: UBS' investment chief identifies 4 critical tech industries to start carefully buying the dip in after the correction

"We expect both further volume growth and sustained margin strength for Tesla," Levy and Young wrote. They added that they expected profits to come in above forecasts.

"With robust fundamentals ahead and with the stock having been caught in the market decline, we believe the stock should recover."

Deutsche Bank and Morgan Stanley last week both said they were upbeat about Tesla, despite the company warning that it would have to slow production due to supply chain issues.

Deutsche gave a 12-month stock price target of $1,200, while Morgan Stanley gave a target of $1,300. However, JPMorgan has remained downbeat, giving a target of $325.

The Nasdaq 100 was up more than 1.9% on Monday morning as Tesla and other technology companies rebounded.