Tesla’s stock surged by 6% following Morgan Stanley’s optimistic prediction that the company could experience a remarkable $600 billion boost in market value, all thanks to its cutting-edge Dojo supercomputer. Tesla, already the world’s most valuable automaker, introduced the Dojo supercomputer in July, dedicating over $1 billion to its development in the coming year.
The Dojo supercomputer has the potential to tap into new markets beyond conventional vehicle sales, thanks to its capabilities in training artificial intelligence models for self-driving cars.
Morgan Stanley analysts, led by Adam Jonas, expressed confidence that Dojo could revolutionize various industries, envisioning applications in devices with real-time decision-making abilities based on visual data from cameras. The positive outlook prompted the Wall Street brokerage to upgrade Tesla’s stock to “overweight” from “equal-weight,” even replacing Ferrari’s U.S.-listed shares as its “top pick.”
Morgan Stanley increased its 12-18 month target on Tesla’s shares by 60% to $400, which would translate to an estimated market capitalization of approximately $1.39 trillion.
Jonas emphasized that Dojo’s true value lies in software and services, with revenue projections for Tesla’s network services business raised to $335 billion by 2040, compared to the previous estimate of $157 billion.
Jonas expects this unit to contribute more than 60% of Tesla’s core earnings by 2040, marking a significant increase from the projections for 2030. Tesla’s forward price-to-earnings ratio, at 57.9, far exceeds that of traditional automakers like Ford and General Motors, highlighting the market’s confidence in Tesla’s future prospects.
