Wall Street's biggest Tesla bull still sees the stock rebounding 122% from current levels - and doesn't blame Musk's Twitter dalliance for a brutal December sell-off

• Tesla stock is down more than 65% in 2022, but longtime bull Adam Jonas of Morgan Stanley isn't giving up.
• Despite recently trimming his price target, Jonas still sees 122% upside for Tesla shares.

Morgan Stanley remains bullish on Tesla stock despite recent turmoil and worry over Elon Musk's focus.

In a recent client note, longtime Tesla proponent Adam Jonas cut his price target on the stock $250, down from $330 previously. But despite the mea culpa, his new forecast still calls for 122% upside from Wednesday's close.

Jonas offered two main reasons for his continued optimistic outlook: Tesla will extend its existing lead versus electric-vehicle competitors, and also see benefits from the Inflation Reduction Act.

When addressing Tesla's more than 65% drop in 2022, including a 40% plunge in December alone, Jonas stopped short of blaming CEO Elon Musk's preoccupation with Twitter — something that a growing chorus of critics have pointed to as a major loss driver. He instead attributed it to supply outpacing demand for the first time since the COVID-19 pandemic, and assorted "technical factors."

"The last two years of demand exceeding supply will be substantially inverted to supply exceeding demand," Jonas wrote. "Within this environment, we believe players that are self-funded (non-reliant on external capital funding) with demonstrated scale and cost leadership throughout the value chain (from manufacturing to up-stream material supply) can be relative winners."

He continued: "Between a worsening macro backdrop, record high unfavorability, and increasing competition, there are hurdles to overcome. Yet we do believe that in the face of all these pressures, Tesla will widen its lead in the EV race, as it leverages its cost and scale advantages to further itself from the competition."