By encouraging the use of robo-taxis and its software services, the Dojo supercomputer may propel an increase in the automaker’s market value of up to $600 billion, according to Morgan Stanley analysts, who also drove a 6% increase in the shares of the maker of electric vehicles in premarket trade on Monday.
The creation of Dojo, a supercomputer used to train AI models for self-driving cars, began in July at Tesla, the world’s most valuable manufacturer, which also aims to invest more than $1 billion in the project through 2019.
Dojo potentially opens up new addressable markets that “extend well beyond selling vehicles at a fixed price, according to a note published on Sunday by Morgan Stanley analysts led by Adam Jonas.
What additional markets might emerge if Dojo is successful in making cars ‘see’ and ‘react? I wondered. Consider any edge gadget that has a camera and makes judgments in real-time based on what it sees.
Ferrari’s U.S.-listed shares were replaced by Tesla’s stock after the Wall Street brokerage firm raised it from “equal-weight” to “overweight” and called it their “top pick.”
According to LSEG data, Morgan Stanley increased its 12- to 18-month target price on Tesla’s shares by 60% to $400, making it the highest among Wall Street brokerages. At that price, according to Morgan Stanley’s estimates, the EV manufacturer would have a market capitalization of nearly $1.39 trillion.
Based on the stock’s Friday closing price of $248.5, which is around 76% greater than Tesla’s estimated $789 billion market value, Before Monday’s bell, the share price increased by nearly 6%, reaching $264.
Jonas anticipates that Dojo will be the program and service that add the most value.
Morgan Stanley increased its forecast for network services revenue from $157 billion to $335 billion by 2040.
By 2040, nearly doubling from 2030, Jonas projects the segment to provide more than 60% of Tesla’s core earnings.
This growth is mostly attributable to the expanding market for third-party fleet licensing and the rising ARPU (average monthly revenue per user).
According to LSEG statistics, Tesla’s 12-month forward price-to-earnings ratio of 57.9 is far higher than that of venerable automakers Ford at 6.31 and General Motors at 4.56.
