By
Bena Ilyas
April 25th, 2024
Morgan Stanley had to upgrade its target price for Tesla shares for the next 12 to 18 months, from $250 to $400.
Following a Monday report of an upgraded prediction by Morgan Stanley analysts, Tesla shares have now gained 10.09%. In an optimistic note to investors, the investment bank shared how it foresees the electric vehicle (EV) maker selling AI technology to other automakers. Additionally, Morgan Stanley also sees Tesla cutting down on the cost of chips by using its own GPUs. That is, at least, for as much as possible.
The report also highlighted how Tesla’s supercomputer Dojo holds massive potential for the automaker. So much so, that analysts believe that the project may cause a shift in the outlook of Tesla. That is, Dojo could make Tesla more of a tech company than it is an EV maker. According to Morgan Stanley analyst Adam Jonas, “Although Dojo is still early in its development, we believe that its applications long-term can extend beyond the auto industry.”
Ultimately, Morgan Stanley had to upgrade its target price for Tesla shares for the next 12 to 18 months, from $250 to $400. The team also predicted a boost of about $600 billion for Tesla’s market capitalization in the long term.
Tesla Shares Pick Up after Recent Slump
Meanwhile, recall that Tesla has had to slash the prices of its EVs. That is since earlier in the third quarter. However, that decision was based on the company’s last earnings call where it was predicted that production and delivery volumes are likely to drop in the quarter due to planned factory closures.
Also, Tesla cut the price of its premium driver assistance system, otherwise known as the Full Self-Driving or FSD in the US. According to a CNBC report, the company slashed the price from $15,000 to $12,000.
As expected, these price cuts, alongside other factors, were enough to cause Tesla’s share price to shrink over the last few weeks. However, shortly after the Morgan Stanley note was issued on Monday, Tesla shares spiked above $272 mid-day. As of press time today, however, the share price is $273.58.