Investors should buy shares of Nio , which could rebound in the second half on the back of a strong product pipeline, according to Morgan Stanley. Analyst Tim Hsiao named the electric-vehicle maker a tactical idea that will "rise in absolute terms" over the next 15 days after the recent correction in China's auto sector, according to a note Thursday. Hsiao said there's about a 70% to 80% likelihood for this scenario. "While sluggish industry sentiment resulted in the sell-off, we believe NIO's upbeat June sales together with good volume trajectory into 2H, aided by a strong product pipeline, will revive investor confidence in the company's operations and trigger a rebound in the stock," the note said. Morgan Stanley has an overweight rating and a $31 price target on the stock. The price target represents roughly 40% upside from Wednesday's closing price. — CNBC's Michael Bloom contributed to this report.