Shares in Tesla rose 6 per cent on Monday after Morgan Stanley predicted that Tesla’s Dojo supercomputer would add more than $600 billion to the electric car maker’s market value by accelerating its move into robotics and software services.
Tesla, the world’s most valuable carmaker, began production of Dojo in July and expects to spend more than $1 billion on it over the next year. Dojo is designed to train AI models for self-driving cars.
According to Morgan Stanley analysts led by Adam Jones, Dojo can open up new addressable markets “well beyond the sale of fixed-price vehicles”.
In a note on Sunday, Adam Jones said: “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 field of view”.
Ferrari’s US-listed shares were replaced by Tesla’s as the Wall Street brokerage upgraded the stock from “equal weight” to “overweight” and named it a “top pick”.
According to LSEG data, Morgan Stanley raised its 12- to 18-month price target on Tesla shares by 60 per cent to $400, the highest among Wall Street brokerages. At that price, the EV maker would have a market value of nearly $1.39 trillion, according to Morgan Stanley estimates.
Based on Friday’s closing price of $248.5, this is almost 76 per cent higher than Tesla’s market value of around $789 billion. On Monday, the stock was up almost 5.7 percent at $262.70.
Jonas expects Dojo to be the programme and service that creates the most value.
Morgan Stanley raised its revenue forecast for Tesla’s network services division from $157 billion to $335 billion in 2040.
By 2040, Jonas expects the segment to account for more than 60 per cent of Tesla’s core revenue, nearly double the 2030 figure.
“This increase is largely driven by the emerging opportunity we see in third-party fleet licensing, increased ARPU (average monthly revenue per user),” Reuters quoted the analyst as saying.
According to LSEG statistics, Tesla’s 12-month forward price-to-earnings ratio of 57.9 is far higher than that of venerable automakers Ford at 6.31 and General Motors at 4.56.
