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Lemonade’s New Insurance Product Boosts Tesla (TSLA) FSD Narrative, Analyst Says

Tesla, Inc. (NASDAQ:TSLA) is one of the AI Stocks Analysts Are Watching. On January 22, Morgan Stanley analyst Andrew Percoco reiterated an Equalweight rating on the stock with a $425.00 price target. The rating affirmation follows digital insurance company Lemonade’s launch of “Autonomous Car Insurance” that slashes per-mile rates for Tesla’s FSD-engaged driving by approximately 50%.

According to Lemonade, it’s newly launched insurance product marks a significant step forward in “legitimizing autonomous driving, and in particular, Tesla’s Full Self-Driving (FSD) technology.”

The policy serves as a direct link between insurance pricing to miles driven under Tesla’s FSD, which cuts rates by up to 50% for those miles. It differentiates between human-driven and FSD-driven mileage, signaling how its underwriting models recognize autonomous operations as carrying a lower risk.

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This is a notable shift in how insurers treat advanced driver-assistance and autonomy features, signaling confidence in real-world driving data, particularly from Tesla’s fleet.

Morgan Stanley’s investor note highlights how Lemonade’s insurance product can encourage increased FSD usage and adoption. Moreover, lower insurance premiums offer financial incentives for drivers to use Tesla’s FSD more frequently, which reinforces Tesla’s value proposition.

Particularly for Tesla, this means that FSD is beginning to gain recognition beyond mere experimentation, transitioning towards its broader acceptance.

As insurers incorporate increasingly granular driving data into pricing, technologies that demonstrably reduce risk should be rewarded faster and more transparently. For Tesla, this marks another step toward external recognition that FSD is moving from an experimental feature to an economically relevant safety system.

Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.

While we acknowledge the risk and potential of TSLA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSLA and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 10 AI Stocks on Market Radar and 10 Buzzing AI Stocks Analysts are Watching

Disclosure: None.

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When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

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