Apple's cancellation of its electric vehicle project may increase the significance of generative AI. Morgan Stanley has given Apple an 'Overweight' rating with a target price of $220. The company spends $1 billion annually on the electric vehicle project, which could improve its operational leverage. Apple has seen its gross margin rise by approximately 230 basis points over the past three years, with operating profit margins holding steady.

According to a report from a leading investment research firm, artificial intelligence is experiencing an explosive growth moment. Tesla officials announced an upgrade to the company's bipedal robot, Optimus, last week. Morgan Stanley researchers believe that Tesla is approaching a 'Cambrian explosion' moment, where AI will no longer be limited to complex digital computations and chatbot software. Actual sales and profits remain important.