By encouraging the deployment of robotaxis and its software services, Morgan Stanley analysts said that Tesla’s (TSLA.O) Dojo supercomputer could propel a rise in the market value of the carmaker of up to $600 billion.
Dojo, a supercomputer used to train artificial intelligence (A.I.) models for self-driving vehicles, has been in production by the electric vehicle manufacturer (EV) since July. Through next year, the company expects to invest more than $1 billion in Dojo.
Dojo may open up new addressable markets that “extend well beyond selling vehicles at a fixed price,” Morgan Stanley analysts headed by Adam Jonas said in a note on Sunday.
I wondered what additional markets would become available if Dojo successfully made cars ‘see’ and react. Any gadget at the edge with a camera that makes real-time judgments based on its visual field qualifies.
The Wall Street firm replaced Ferrari’s U.S.-listed shares with Tesla’s stock as their “top pick,” raising their rating on it from “Equal-weight” to “Overweight”.
At $262.63 in premarket trade, Tesla stock was up roughly 5.7%.
According to LSEG statistics, Morgan Stanley increased its price target for Tesla’s shares over the next 12 to 18 months by 60% to $400, making it the highest among Wall Street brokerages. According to Morgan Stanley’s calculations, the E.V. manufacturer would have a market value of almost $1.39 trillion at that price.
Following the stock’s Friday closing price of $248.5, its market worth is almost $789 billion.
Jonas believes that Dojo will provide the most value in software and services.
The revenue forecast from Tesla’s network services division was increased by Morgan Stanley from $157 billion to $335 billion in 2040.
Jonas projects that by 2040, as compared to 2030, the segment will make up more than 60% of Tesla’s core profits. Increased ARPU (average monthly revenue per user) is a major factor in this growth, which we observe in third-party fleet licensing.
Ford (F.N.) and General Motors (GM.N), two American traditional manufacturers, are well behind Tesla, which has a 12-month forward price-to-earnings ratio of 57.9.
