Tesla rose 10.09% on Monday after Morgan Stanley said its Dojo supercomputer could add $600 billion to the electric car maker’s market value by accelerating its push into robotaxis and transportation services.
Tesla, already the world’s most valuable automaker, began producing the supercomputer in July to train artificial intelligence models for self-driving cars and plans to invest more than $1 billion in Dojo by next year.
Dojo can open up new markets that “go well beyond selling vehicles at a fixed price,” say Morgan Stanley analysts led by Alex Jonas.
What other markets could open up if Dojo can help cars see and react? “Imagine a cutting-edge device with a camera that makes real-time decisions based on your field of view.”
The investment bank has raised its recommendation on Tesla shares from “Hold” to “Overweight” and replaced U.S.-listed Ferrari shares with Tesla as a “favorite pick.”
Morgan Stanley is therefore increasing its 12-18 month target for Tesla shares by 60% to $400, the highest of any Wall Street agency, according to LSEG data. This would give the car manufacturer a value of $1.39 trillion. That figure is 76% higher than Tesla’s market value, which is about $789 billion at $248.5 per share as of Friday’s close.
The bank raised its revenue estimate for Tesla’s network services business to $335 billion in 2040, up from $157 billion previously. Analysts expect the unit to account for more than 60% of Tesla’s profits in 2040, nearly twice as much as in 2030. “This increase is largely driven by the emerging opportunities we see in third-party fleet licensing see,” he says analyst.
According to LSEG data, Tesla’s trailing 12-month price-to-earnings ratio of 57.9 is well ahead of Ford (6.31) and General Motors (4.56).
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