Tesla jumps on prediction supercomputer unit could add $600 billion to mkt value
(Reuters) -Tesla's Dojo supercomputer could power a near $600 billion jump in the automaker's market value by boosting the adoption of robo-taxis and its software services, Morgan Stanley analysts said, sending the electric vehicle maker's shares up 6% in premarket trading on Monday.
Tesla (NASDAQ:TSLA), already the world's most valuable automaker, started production of the supercomputer to train artificial intelligence (AI) models for self-driving cars in July and plans to spend more than $1 billion on Dojo through next year.
Dojo can open up new addressable markets that «extend 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 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.»
The Wall Street brokerage upgraded Tesla's stock to «overweight» from «equal-weight» and made it their «top pick,» replacing Ferrari (NYSE:RACE)'s U.S.-listed shares.
Morgan Stanley raised its 12-18 month target on Tesla's shares by 60% to $400 — the highest among Wall Street brokerages, as per LSEG data — which, it estimated, would give the EV maker a market capitalization of about $1.39 trillion.
That's about 76% higher than Tesla's market value of about $789 billion, based on the stock's close of $248.5 on Friday. The stock climbed about 6% to $264 before the bell on Monday.
Jonas expects Dojo to drive the most 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 earlier.
Jonas expects the unit to account for more than 60% of Tesla's core
Read more on investing.com
