Tesla’s gonzo market capitalization is so large that its daily value swings tend to exceed those of most major automakers combined. For example, on slow days it might only be as good as a Volvo or (hotlink) Nissan (/hotlink).
Yet Monday’s 10% surge added $70 billion, creating a value increase roughly the size of BMW Group out of thin air. This kind of investor excitement is usually limited to the field of artificial intelligence — and this example is no exception.
Earlier, Morgan Stanley issued a super bullish rating on Tesla, which was based almost entirely on an analysis of the growth prospects of the electric car maker, which sells its Dojo supercomputer as a service.
“The more we research Dojo, the more we realize the stock may be undervalued,” Morgan Stanley wrote. The report upgraded Tesla to an effective “buy” rating, listing it as is a top pick and predicts its share price will return to its all-time high of around $400 within 12 months from November 2021.
Dojo represents Tesla’s attempt to solve one of the biggest hardware problems facing artificial intelligence—memory storage and bandwidth bottlenecks that prevent the technology from scaling effectively. This is especially true when it comes to training on visual data.
Dojo will enter production in July and is expected to rapidly scale to the equivalent of 300,000 Nvidia A100 GPUs with a total compute volume of 10 billion floating point operations (a measure of how fast a supercomputer can run) by next October.
Dojo will begin production in July 2023. Within 6 weeks! https://t.co/6WEJr6znxs
— Bradford Ferguson (@bradsferguson) June 21, 2023
This would make it potentially the most advanced machine in the world in terms of processing power and could help Musk realize his long-held dream of fully autonomous driving (FSD).
“Third-party Dojo services could provide investors with the next phase of Tesla’s growth story,” the investment bank wrote.
At its core is Tesla’s proprietary “D1” chip, which has 50 billion transistors and can theoretically significantly increase the capacity and speed of data transmission without a corresponding increase in energy costs.
Its streamlined design will allow Musk to feed his neural network the vast amounts of visual information collected from millions of Tesla cars on the road.
Morgan Stanley said it could also help AI-related industries such as robotics, healthcare and security.
Not enough Nvidia chips
First announced at Tesla’s inauguration artificial intelligence day Musk has been trying to temper expectations with the release of his humanoid robot Optimus Prime two years ago. In October, he warned that “the jury is still out” on whether Dojo is worth the effort.
But anyway, he’s willing to risk a $1 billion investment because he can’t procure enough of Nvidia’s advanced A100 chips.
If successful, Tesla could become the first company to roll out self-driving software that can be flashed to all vehicles in its fleet via an over-the-air remote update. Musk has finally made good on his promise to turn 1 million cars into robotaxis overnight by the end of 2020.
Musk himself has sought to calm concerns about self-driving technology from frustrated customers like Apple co-founder Steve Wozniak.last month he live streaming The driver in the alpha version of FSD version 12 is said to feature another overhaul of the software.
This time, Tesla developers want to remove nearly all of the 300,000-plus lines of code in v11 and replace it with artificial intelligence that can continuously learn and improve with every mile a Tesla vehicle travels.
Musk hinted that whenever v12 is released, it will mean that FSD will no longer need human supervision Nearly three years exist beta testing.
However, Monday’s fireworks of a $70 billion jump in market value did cause controversy among Tesla’s veteran investors.
Bulls criticized Morgan Stanley for taking so long to grasp Dojo’s potential, while bears pointed to a passage in the report saying analysts were never really able to prove that it actually had the effects Musk claimed.
“It is difficult to unequivocally confirm many of Tesla’s claims about Dojo’s cost and performance,” the report acknowledges.
Svlook