Tesla’s New Dojo Supercomputer Might Drive Behemoth Market Traction of $600 Billion, Predicts Morgan Stanley
Morgan Stanley analysts have suggested that Tesla’s venture into the world of artificial intelligence, specifically via their Dojo supercomputer, could trigger a substantial jump in the automaker’s market value, potentially totalling around $600 billion. This remarkable surge could be influenced by the expected increase in robo-taxi adoption and expansion of software services.
This Silicon Valley titan initiated production of their supercomputer, designed exclusively to tutor AI models intended for autonomous driving, back in July. Tesla has openly committed to a $1 billion expenditure on Dojo through the following year. The experts at Morgan Stanley, with Adam Jonas at the helm, point towards an exciting new prospect — Dojo’s potential to broaden the automaker’s addressable markets in a way that transcends the traditional model of selling vehicles at a fixed price.
“If Dojo can help make cars ‘see’ and ‘react,’ what other markets could open up? Think of any device at the edge with a camera that makes real-time decisions based on its visual field,” says Adam Jonas.
Interestingly, this Wall Street brokerage powerhouse has shifted its recommendation on Tesla’s stock from “Equal-weight” to “Overweight,” and have served up Tesla as their “top pick,” taking the baton from Ferrari’s U.S. listed shares. As a result, Tesla shares experienced an almost 5.7% increase, reaching $262.63 in premarket trading.
Breaking the norms, Morgan Stanley has escalated its 12–18-month target on Tesla’s shares by a whopping 60%, marking it at $400, which is the topmost among Wall Street brokerages according to LSEG data. This estimate would catapult Tesla’s market capitalisation to an estimated $1.39 trillion, up from the current $789 billion, given shares finished at $248.5 last Friday.
Jonas opines that the software and service sector is where Dojo could churn out the most value. Reflecting this potential, Morgan Stanley has upped its revenue forecast for Tesla’s network services business, envisaging a rise to $335 billion by 2040 from the previous $157 billion. Moreover, Jonas anticipates this unit to constitute over 60% of Tesla’s central earnings by 2040, doubling from 2030.
“This increase is mainly driven by the emerging opportunity we see in third-party fleet licensing, increased ARPU (average monthly revenue per user),” says Jonas.
Tesla boasts of a forward price-to-earnings ratio of 57.9 for the next 12 months, leaving behind U.S. traditional automakers like Ford at 6.31 and General Motors at 4.56. Given the tech-giant’s ambitious strides, the electric vehicle industry is set to witness a gripping journey.
