The logo of car manufacturer Tesla is seen at a dealership in London, Britain, on May 14, 2021. Portal/Matthew Childs/File Photo Acquire License Rights
Sept 11 (Portal) – Tesla’s (TSLA.O) Dojo supercomputer could add nearly $600 billion to the automaker’s market value by boosting the adoption of robotaxis and its software services, Morgan Stanley analysts said.
The electric vehicle (EV) maker began production of the supercomputer used to train artificial intelligence (AI) models for self-driving cars in July and plans to spend more than $1 billion on Dojo by next year.
Dojo can open up new addressable markets that go “well beyond selling vehicles at a fixed price,” Morgan Stanley analysts led by Adam Jonas said in a note on Sunday.
“If Dojo can help cars ‘see’ and ‘react’, what other markets could open up? Think about a device at the edge with a camera that makes real-time decisions based on its field of view.”
The Wall Street broker increased its recommendation on Tesla shares to “Overweight” from “Equal Weight,” making it its “Top Pick,” replacing U.S.-listed Ferrari shares.
Tesla shares rose nearly 5.7% to $262.63 in premarket trading.
Morgan Stanley raised its 12-18 month target for Tesla shares by 60% to $400 – the highest among Wall Street brokers, according to LSEG data – giving the electric vehicle maker an estimated market cap of about $1 .39 trillion US dollars.
That compares to the current market value of around $789 billion after the stock closed at $248.5 on Friday.
Jonas expects Dojo to achieve the greatest value in software and services.
Morgan Stanley raised its revenue estimate from Tesla’s network services business to $335 billion in 2040, from $157 billion previously.
Jonas expects the unit to account for more than 60% of Tesla’s core revenue by 2040, nearly doubling from 2030.
“This increase is largely driven by the emerging opportunities we see in third-party fleet licensing and higher ARPU (average monthly revenue per user).”
With a 12-month price-earnings ratio of 57.9, Tesla is well ahead of the traditional US car manufacturer Ford (FN) with 6.31 and General Motors (GM.N) with 4.56.
Reporting by Roshan Abraham and Susan Mathew in Bengaluru, additional reporting by Medha Singh; Edited by Savio D’Souza, Sherry Jacob-Phillips and Rashmi Aich
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