Investing.com -- Morgan Stanley told clients in a note on Tuesday that Tesla will need clearer evidence that its Robotaxi effort is scaling to strengthen investor conviction, following feedback from conversations after the company's second-quarter earnings. The analyst added that the quarter did not materially alter his long-term thesis that Tesla is positioned to lead in Physical AI. Greater conviction in the stock, Percoco said, "will depend on evidence that the Robotaxi flywheel is working," with more vehicles on the road, higher city-level density, rising weekly unsupervised miles and improving unit economics. He called Robotaxi "the nearer-term validation point" for Tesla's broader Physical AI strategy. Related articlesTesla needs Robotaxi flywheel proof to boost investor conviction: Morgan StanleyCiti pushes back Fed rate cuts to May after blowout January jobs reportAs Claude disrupts stock market, Anthropic researcher warns 'world is in peril'