5 Huge Analyst Calls: Tesla's Vast AI Potential; DoorDash Staring Down Hard Times

investing.com:

Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week: upgrades for Tesla, CVS, ImmunoGen, and Etsy, and a downgrade for DoorDash.

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What happened? Last Sunday Morgan Stanley upgraded Tesla (NASDAQ:TSLA) to Overweight with a $400 price target.

What’s the full story? Morgan Stanley analysts are bullish on Tesla, the electric vehicle and clean energy company, and have raised their price target to $400. The analysts think that Tesla’s value driver is not only its vehicle sales, but also its software and services revenue, which can open up new addressable markets and generate higher margins.

Morgan Stanley points to Dojo (I’m sure you’ve seen the memes), Tesla’s custom supercomputing effort, as a key catalyst for Tesla’s software and services growth. Dojo is expected to power Tesla’s full self-driving system (version 12) and Tesla’s next AI day, which are both slated for late 2023 or early 2024. Morgan analysts also see potential in Tesla Mobility (autonomous robo-taxis) and Tesla Network Services (SaaS business derived from Tesla vehicles and third-party customers), which they expect to have faster adoption and higher average revenue per user (ARPU).

Further, not surprising to many, Morgan Stanley analysts have increased their earnings forecasts for Tesla by about 20% by FY25/26, and they think the company's price target is justified by Tesla’s growth and valuation multiples compared to its tech peers.

Overweight at Morgan Stanley means: “The stock's total return is expected to exceed the average total return of the analyst's industry (or industry team's) coverage