Tesla’s Dojo Supercomputer, designed to train AI models for autonomous vehicles, could potentially grant the electric vehicle giant a substantial “asymmetric advantage” and, as per Morgan Stanley’s estimation, increase its market capitalization by a remarkable $600 billion, equating to a 76% surge. The company initiated Dojo’s production in July and has ambitious plans to invest over $1 billion in the project throughout the next year.
Morgan Stanley analysts, led by Adam Jonas, emphasized that Dojo’s capabilities could open up new markets that extend beyond the traditional vehicle sales model. They envision scenarios where Dojo’s technology could be applied to any edge device equipped with a camera, enabling real-time decision-making based on visual data.
In light of these developments, The Wall Street brokerage has upgraded its recommendation for Tesla’s stock, elevating it from “equal-weight” to “overweight,” and designating it as their “top pick,” thereby replacing Ferrari’s U.S.-listed shares. Moreover, Morgan Stanley has raised its 12-18 month target for Tesla’s shares by an impressive 60% to $400, marking the highest target among Wall Street analysts. This target could potentially result in Tesla’s market capitalization reaching around $1.39 trillion, compared to its current valuation of approximately $789 billion, as of Friday’s closing stock price of $248.5.
Adam Jonas anticipates that Dojo will create the most significant value in software and services. He has revised his revenue estimate for Tesla’s network services business to $335 billion by 2040, up from the previous estimate of $157 billion. Furthermore, Jonas predicts that this unit will contribute to over 60% of Tesla’s core earnings by 2040, nearly doubling its share from 2030. He attributes this growth to emerging opportunities in third-party fleet licensing and increased average monthly revenue per user (ARPU).
