Elon Musk is eager to transform Tesla Inc. into a robotics and artificial intelligence company, but the electric vehicle maker’s stock price already reflects those businesses and is at a “full valuation,” according to Morgan Stanley, which lowered its rating on the company to the equivalent of a hold, its first cut since June 2023.

Tesla shares trade at about 210 times projected earnings over the next 12 months, making it the second most expensive company in S&P 500 Index, trailing just Warner Brothers Discovery Inc. at 220 times and well ahead of third-place Palantir Technologies Inc.’s multiple of 186.

“While it is well understood that Tesla is more than an auto manufacturer, we expect a choppy trading environment” over the next year, analyst Andrew Percoco wrote in a note to clients o

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