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Morgan Stanley: Tesla’s Supercomputer Dojo Expected to Add Around $600B to Company’s Market Cap

UTC by Mayowa Adebajo · 2 min read
Morgan Stanley: Tesla’s Supercomputer Dojo Expected to Add Around $600B to Company’s Market Cap
Photo: Depositphotos

Going by the new estimates, Morgan Stanley expects that Tesla’s market capitalization will surge by at least $600 billion over the next 12 to 18 months.

A recent Reuters report has tipped Tesla Inc (NASDAQ: TSLA), the electric vehicle (EV) maker, as poised to see a major boost in its market capitalization. This follows after Morgan Stanley analysts published a note about Tesla’s Dojo on Sunday. Addressing investors in the note, the team of analysts, led by Adam Jonas, shared how the supercomputer could potentially open up new addressable markets that “extend far beyond selling vehicles at a fixed price”.

According to Morgan Stanley, Tesla may already be diversifying. That is in the sense that it currently identifies as both an auto and a tech company. However, the investment bank also believes that Tesla is gradually gravitating more towards the tech side. And that means that a larger percentage of its revenue will now come from software and services.

Meanwhile, it might be worth mentioning that the significant growth that Tesla has seen as a tech company can be attributed to DOJO. That is the supercomputer that trains the company’s Full Self-Driving (FSD) System.

Since the EV maker began the production of Dojo in July, it has committed quite a considerable amount to it. That is not minding the fact that the company has also revealed plans to spend another $1 billion over the next year.

Overall, the Jonas-led Morgan Stanley team believes that Dojo is the ultimate game changer for Tesla. And, as such, has released estimates that upped TSLA’s price target from $250 to $400 per share. The investment bank also confirms it is updating Tesla’s rating from equal weight to Overweight. That is while it also makes TSLA stock its “Top Pick”. Part of the note reads:

“While it is difficult to explicitly validate the many claims Tesla has made about Dojo’s cost and performance, we believe Tesla has a chance of bringing forth a competitive customized solution given the company’s innovation track record and capabilities.”

Dojo to Impact on the Market Cap of Tesla

Going by the new estimates, Morgan Stanley expects that Tesla’s market capitalization will surge by at least $600 billion over the next 12 to 18 months. That is after it raised the share price target by 60% to $400.

All things being equal, Tesla will hit a market capitalization of about $1.39 trillion, says Morgan Stanley. As of publication, however, Tesla’s market cap currently sits at about $780 billion.

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