(Bloomberg) — Tesla Inc.’s Dojo supercomputer may add as much as $500 billion to the company’s market value through faster adoption of robotaxis and network services, according to Morgan Stanley.
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Dojo can open up “new addressable markets,” just like AWS did for Amazon.com Inc., analysts including Adam Jonas and Daniela M Haigian wrote in a note, upgrading the stock to overweight from equal-weight and raising its 12-month price target to a Street-high $400 per share from $250. Tesla has already more than doubled this year and closed at $248.50 on Friday.
The supercomputer, designed to handle massive amounts of data in training driving systems, may put Tesla at “an asymmetric advantage” in a market potentially worth $10 trillion, they wrote, and could make software and services the biggest value driver for Tesla from here onward. The next version of Tesla’s full self-driving system, expected by year-end, and the company’s Artificial Intelligence day in early 2024 are worth watching, they added.
Tesla has been mentioning how Dojo gives it an edge in AI and self-driving technology since at least 2021. In July this year, CEO Elon Musk told investors that the carmaker plans to invest more than $1 billion on the project by the end of 2024.
That base-case target from Morgan Stanley would put the stock near its record close of $409.97 in November 2021. That makes the firm a notable outlier: The average price target among analysts tracked by Bloomberg is $268.42.
“The more we looked at Dojo, the more we realized the potential for underappreciated value in the stock,” the Morgan Stanley analysts said.
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