Tesla

Through a potential $600 billion gain, Tesla's supercomputer is a game changer in the market.

According to Morgan Stanley analysts, Tesla's Dojo supercomputer might drive a nearly USD 600 billion increase in the market value of the automaker by spurring the use of Robotaxis and its software offerings. Dojo, a supercomputer designed to train artificial intelligence (AI) models for self-driving cars, has been in production since July, according to the electric vehicle manufacturer (EV), which expects to spend over $1 billion on it over the following 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 wrote in a note on Sunday. What additional markets would become available if Dojo is successful in making cars'see' and react,' I wondered. Any gadget at the edge with a camera that makes decisions in real time based on its visual field qualifies. The Wall Street brokerage replaced Ferrari's U.S.-listed shares with Tesla's stock as their "top pick," raising their recommendation on it from "Equal-weight" to "Overweight".

In premarket trading, Tesla stock was up almost 5.7%, trading at USD 262.63. According to LSEG data, Morgan Stanley increased its 12- to 18-month price target on Tesla's shares by 60% to USD 400, making it the highest among Wall Street brokerages. At that price, the EV manufacturer's market capitalization would be around USD 1.39 trillion, according to Morgan Stanley's estimates.

Comparatively, its current market worth is almost USD 789 billion, up from Friday's closing price of USD 248.5. Jonas anticipates Dojo to be the program and service that adds the most value. Morgan Stanley increased its forecast for network services revenue from USD 157 billion to USD 335 billion in 2040. By 2040, nearly doubling from 2030, Jonas projects the segment to provide more than 60% of 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)."Ford, which has a 12-month forward price-to-earnings ratio of 6.31, and General Motors, which has a 4.56, are both well behind Tesla, which has a 57.9 ratio.