Morgan Stanley says Tesla Inc’s Dojo supercomputer could add as much as $500 billion to the company’s market capitalization through faster adoption of robotaxis and web services.
Analysts led by Adam Jonas wrote in a note that Dojo could open up “new addressable markets,” much like AWS did for Amazon.com Inc., upgrading the stock to overweight from equal weight and placing it at overweight. The 12-month price target was raised to a market high of $400 per share, with a starting price of $250.
Tesla shares have more than doubled this year, rising 6.1% in U.S. premarket trading on Monday. The stock’s value is expected to increase by about $46 billion. Morgan Stanley was one of Musk’s main advisory firms, including on the $44 billion acquisition of Twitter Inc., now known as X.
Jonas said the supercomputer, designed to process the vast amounts of data used in training driving systems, could give Tesla an “asymmetric advantage” in a market potentially worth $10 trillion and could enable software and services. Become Tesla’s biggest value driver.
He added that the next version of Tesla’s fully self-driving system, expected to be launched by the end of the year, is worth watching, as is the company’s Artificial Intelligence Day in early 2024. The stock is down about 4.2% since Jonas Cut recommendation for the stock June to neutral.
Tesla has been mentioning how Dojo gives it an edge in artificial intelligence and autonomous driving technology since at least 2021.In July, CEO Elon Musk told investors that the automaker planned to invest more than US$1 billion The project will be completed by the end of 2024.
Morgan Stanley’s base price target would put the stock near a record close of $409.97 in November 2021. That makes the company a clear outlier: The average price target among analysts tracked by Bloomberg is $268.42.
“The more we look at Dojo, the more we realize the stock may be undervalued,” Morgan Stanley analysts said.
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