Dojo supercomputer to boost Tesla’s valuation by $600 billion: Morgan Stanley

After Morgan Stanley predicted that Tesla’s Dojo supercomputer would boost the electric vehicle maker’s market value by over $600 billion by accelerating its entry into robotaxis and software services, shares of Tesla rose by 6 per cent on Monday.

The world’s most valuable car manufacturer, Tesla, began producing Dojo in July and expects to spend more than $1 billion on it over the course of the following year. Dojo will train AI models for self-driving cars.

According to the analysts at Morgan Stanley led by Adam Jones, Dojo can open up new addressable markets that “extend well beyond selling vehicles at a fixed price”.

In a note drafted on Sunday, Adam Jones said, “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.”

Ferrari's U.S.-listed shares were replaced by Tesla's stock as the Wall Street brokerage raised it from "equal-weight" to "overweight" and designated it as the "top pick."

According to LSEG data, Morgan Stanley increased its 12-to-18-month price target on Tesla's shares by 60 per cent to $400, making it the highest among Wall Street brokerages. At thisprice, according to Morgan Stanley’s estimates, the EV manufacturer would have a market value of nearly $1.39 trillion.

Based on the stock’s closing value of $248.5 on Friday, this is almost 76 per cent greater than Tesla's market worth of about $789 billion. On Monday, the stock increased by almost 5.7 per cent to $262.70.

Jonas anticipates Dojo to be the programme and service that adds the most value.

Morgan Stanley increased its revenue forecast for Tesla's network services division from $157 billion to $335 billion in 2040.

By 2040, nearly doubling from 2030, Jonas projects the segment to provide more than 60 per centof Tesla's core earnings.

“This increase is largely driven by the emerging opportunity we see in third-party fleet licensing, increased ARPU (average monthly revenue per user),” Reuters quoted the analyst as saying.

As per the LSEG statistics, Tesla's 12-month forward price-to-earnings ratio of 57.9 is far higher than those of venerable automakers Ford at 6.31 and General Motors at 4.56.

(With inputs from Reuters)

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