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Attendees check out Tesla electric cars during the Electrify Expo In DC on July 23, 2023 in Washington, DC.
New York CNN –
Tesla’s Dojo supercomputer could add $500 billion to the electric vehicle maker’s market value, Morgan Stanley analysts said in a note on Monday.
Shares of Tesla rose more than 6% in early trading Monday morning after the Morgan Stanley team offered a rosy forecast about the automaker’s supercomputing efforts. The Morgan Stanley team, led by long-time Tesla analyst Adam Jonas, predicted that the huge increase in value could come as Dojo potentially opens up new revenue streams through the wider adoption of robotaxis and software services.
The analysts compared Dojo’s potential at Tesla to the “same forces that drove Amazon Web Services to push Amazon’s profitability to new heights.”
“Investors have long debated whether Tesla is a car company or a technology company. We believe it is both, but see the biggest value driver here in software and services revenue,” the statement said.
Dojo, an in-house supercomputer that has been in the works at Tesla for about five years, is designed to train AI systems to perform complex tasks such as supporting Tesla’s Autopilot driver assistance system and advancing Tesla’s “fully autonomous driving.” efforts.
Morgan Stanley analysts see Dojo as an opportunity to “open up new addressable markets that go well beyond selling vehicles at a fixed price.”
The analysts added that the latest version of Tesla’s fully self-driving system (expected to be unveiled by the end of the year) and Tesla’s next AI day (expected in early 2024 but not yet announced) will be “worth watching.”
Tesla shares have doubled since the start of the year but are still far from the all-time intraday high of $414.50 set in November 2021. The world’s most valuable automobile manufacturer had a market capitalization of around $788.74 billion at the close of trading on Friday.