(Bloomberg) — Tesla Inc’s Dojo supercomputer could add as much as $500 billion to the company’s market value by rapidly adopting robotics and networking services, Morgan Stanley said.
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Dojo could open up “new addressable markets,” just like AWS for Amazon.com Inc., analysts led by Adam Jonas raised the stock to overweight in a note and raised its 12-month price target to a street-high $400 a share from $250.
Shares of Tesla, which have more than doubled this year, rose as much as 6.6% on Monday. The stock was on track to increase its market value to $43 billion. Morgan Stanley is one of Musk’s key advisory firms, including the $44 billion takeover of Twitter Inc., now known as X.
A supercomputer designed to process massive amounts of data could put Tesla at a “fair advantage” in the $10 trillion market, Jonas said. .
Tesla’s fully self-driving system, expected by the end of the year, and the company’s potential artificial intelligence date in 2018. Tesla has not officially announced an AI Day for next year.
In the latest close, Tesla’s stock price has fallen about 4.2% since Jonas cut his recommendation to neutral in June, compared with a 2.1% gain in the S&P 500 Index and a 2.8% gain in the Nasdaq 100 Index over that period.
Jonas previously made dramatic changes to his outlook on Tesla shares, based on predictions about the company’s self-driving capabilities, which have yet to materialize.
In the year In August 2015, Tesla launched an on-demand mobility service called Uber Technologies Inc. And it raised its price target by 66% on the view that it will begin to compete with the likes of Lyft Inc. Tesla has not yet offered such a service, and the company’s markets such as Autopilot and fully self-driving require constant driver control.
Tesla has been hinting at how the Dojo will be powered by AI and self-driving technology since at least 2021. In July of this year, CEO Elon Musk told investors that the automaker plans to invest more than $1 billion by the end of 2024. .
That puts Morgan Stanley’s base case target for the stock near $409.97 in November 2021. That makes the company popular: The average price target among analysts tracked by Bloomberg is $268.42.
“The more we looked at Dojo, the more we recognized the potential for underpricing in the stock,” Jonas said.
–With assistance from Aaron Kirchfeld, Craig Trudel and Rhea Rao.
(Updated stock movement and market price findings in paragraph three.)
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