Tesla shares rose more than 10% on Monday after Morgan Stanley predicted that the electric vehicle maker’s Dojo supercomputer would add up to $500 billion to the company’s market value.
Tesla closed at $273.58 – a value that has already more than doubled so far this year – after a group of Morgan Stanley analysts led by Adam Jonas upgraded the stock to “overweight” from “equal weight.” had.
The “overweight” rating means Morgan Stanley bankers believe Tesla’s stock price is poised to outperform the industry, typically signaling investors that they should buy more shares.
The investment bank also raised Tesla’s 12-month price target from $250 per share to $400 per share – a Wall Street high.
Morgan Stanley’s optimism is fueled by the potential of the Elon Musk-owned Dojo supercomputer – which leverages thousands of GPU chips from Nvidia and will be used to train Tesla’s self-driving capabilities.
“The same forces that drove AWS forward [Amazon Web Services] Reaching 70% of Amazon’s total EBIT can work for Tesla, in our opinion, and open up new addressable markets well beyond selling vehicles at a fixed price. The catalyst? “Dojo, Tesla’s supercomputing customer project that has been in the works for five years,” Jonas wrote.
Dojo technology could also prove extremely valuable in launching robotaxis and network services, pushing Tesla’s current market value of $853.34 billion past the $1.3 trillion mark, said Morgan Stanley, a major advisory firm for Musk, among other things, in his $44 billion deal to buy Twitter, now known as X.
Despite delays and technical issues, Jonas still said, “The more we looked at Dojo, the more we saw the potential for the stock to be underappreciated.”
Accordingly, Tesla’s market capitalization is around 60% away from Morgan Stanley’s target Bloombergwhich means Tesla shares would have to close near its previous record high of $409.97, reached in November 2021.
Dojo could give Tesla an “asymmetric advantage,” Jonas said, meaning software and services could become the most valuable thing Tesla has to offer, even though Musk hasn’t yet implemented the compelling new self-driving technology he promised.
Last month, Musk was spotted driving around the Bay Area to test out the electric car’s new self-driving software. However, the 52-year-old had almost run a red light when the latest glitch erupted in a long-running series of mishaps involving the company’s Autopilot feature.
Musk livestreamed the 45-minute test drive on his social media platform, filming himself leaving Tesla’s headquarters in Palo Alto and fingering a route using a new version of the Full Self-Driving (FSD) software , v12, planned.
For almost 20 minutes, Musk boasts that he didn’t have to intervene: “The ride was smooth.”
The mogul, who also serves as SpaceX’s CEO, has described v12 as “stunning.” Although it has not yet been released to the public, Musk hopes to appeal to consumers of autonomous driving technology on Artificial Intelligence Day in April 2024.
Representatives for Tesla and Morgan Stanley did not immediately respond to the Post’s request for comment.