Tesla’s Market Value Could Surge by $600 Billion with Dojo Innovation

On September 11th – Reuters reported that Tesla saw a 6% increase on Monday, thanks to its Dojo supercomputer robotics and software services speeding up its entry into the electric car market, potentially adding nearly $600 billion to the company’s market value.

Tesla, already the world’s most valuable automaker, began production of its supercomputer in July to train its artificial intelligence (AI) models for self-driving cars, with plans to spend over $1 billion on Dojo by next year.

Morgan Stanley analysts, led by Adam Jonas, wrote in a note on Sunday that Dojo could open up new markets for Tesla that “stretch well beyond selling vehicles at a certain price.”

“If Dojo can assist in ‘seeing’ and ‘reacting’ to cars, what other markets might it open up? Think about any device with a camera that makes real-time decisions based on its field of vision,” they added.

Wall Street brokerage upgraded Tesla’s stock from “Equal Weight” to “Overweight” and replaced U.S.-listed Ferrari shares with “Top Picks.”

Morgan Stanley raised its 12-18 month price target on Tesla shares by 60% to $400 – the highest among Wall Street brokerages, implying a market capitalization of nearly $1.39 trillion, according to Refinitiv data.

Based on Friday’s close of $248.5 per share, it’s roughly 76% above Tesla’s market value of about $789 billion. On Monday, the stock rose nearly 5.7% to $262.70.

Jonas is hopeful that Dojo’s software and services will bring the most value.

Morgan Stanley also raised its revenue estimate for Tesla’s network services business from $157 billion to $335 billion by 2040.

Jonas expects this unit to account for over 60% of Tesla’s core earnings by 2040, which will nearly double from 2030. He stated, “This growth is heavily premised on emerging opportunities in third-party licensing, expanded ARPU (average revenue per user), and inspired by the growth of FSD (Full Self-Driving).”

According to LSEJ data, Tesla has a forward price-to-earnings ratio of 57.9 for the next 12 months, which is significantly ahead of legacy automakers Ford (6.31) and General Motors (4.56).

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