Following Morgan Stanley’s prediction that Tesla’s Dojo supercomputer would accelerate its entry into robotaxis and software services, potentially increasing the electric vehicle maker’s market value by over $600 billion, Tesla’s shares surged by 6 percent on Monday.
Tesla, the world’s most valuable automaker, began production of Dojo in July and plans to invest over $1 billion in it over the next year. Dojo is designed to train AI models for self-driving cars.
Morgan Stanley analysts, led by Adam Jones, believe that Dojo could open up new markets beyond vehicle sales at a fixed price. Jones stated in a note on Sunday, “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.”
As a result of this assessment, Tesla’s stock was upgraded by the Wall Street brokerage from “equal-weight” to “overweight,” replacing Ferrari’s U.S.-listed shares. It was also designated as the “top pick.”
Morgan Stanley raised its 12-to-18-month price target for Tesla’s shares by 60 percent to $400, making it the highest among Wall Street brokerages. At this price point, Tesla’s estimated market value would be nearly $1.39 trillion, a significant increase from its market worth of about $789 billion at Friday’s closing price of $248.5. On Monday, the stock rose by nearly 5.7 percent to $262.70.
Adam Jonas, an analyst at Morgan Stanley, anticipates that Dojo will be the program and service that adds the most value. The revenue forecast for Tesla’s network services division was increased from $157 billion to $335 billion by Morgan Stanley for 2040. Jonas projects that by 2040, this segment will contribute over 60 percent of Tesla’s core earnings, almost doubling from 2030.
Tesla’s 12-month forward price-to-earnings ratio, as per LSEG statistics, stands at 57.9, significantly higher than established automakers like Ford (6.31) and General Motors (4.56).
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