What happened

Shares of topsy-turvy air taxi stock and former special purpose acquisition company play Joby Aviation (JOBY -6.31%) took flight in Thursday-morning trading, rising 12.3% through 10:50 a.m. EDT.

You can thank Morgan Stanley for that.

Yellow electric air taxis over a cityscape.

Image source: Getty Images.

So what

In a note out this morning, investment banker Morgan Stanley initiated coverage of Joby stock with an overweight rating (which doesn't sound like it, but is actually a compliment) and a $16 price target. StreetInsider.com pointed out today that Morgan Stanley is now the first big Wall Street bank to voice an opinion on the stock since Joby went public.

And boy does Morgan Stanley ever like it!

Although MS calls Joby "a pre-revenue company," the analyst believes that electric air taxis could grow into a $1 trillion-a-year industry by 2040. These electrically powered, rotor-lifted aircraft are both cheaper than helicopters and safer to operate, argues Morgan Stanley, and could therefore potentially disrupt the existing air travel industry.

Now what

Peering into the future, Morgan Stanley sees Joby operating a fleet of as many as 1,900 air taxis 10 years from now -- a fleet equal to about 18% of the current U.S. fleet of helicopters -- and being worth as much as $25 a share if it captures part of what the analyst calls the "Live in the Hamptons, Work in the City" market (i.e., rich people who commute to work by air) and/or creates new markets of its own to dominate.

If the company fails to scale up, granted, MS says Joby could lose half its value and fall to $5 a share. Still, on balance the analyst thinks $16 is a fair price to pay for Joby.

Investors today seem inclined to agree.