In a recent note, analysts at Morgan Stanley have suggested that Tesla’s Dojo supercomputer has the potential to boost the electric vehicle manufacturer’s market value by $500 billion. Following this optimistic forecast, Tesla’s shares surged over 6% during early trading on Monday.
The Morgan Stanley team, led by longtime Tesla analyst Adam Jonas, outlined that this substantial increase in value could be attributed to Dojo’s ability to unlock new revenue streams through the broader adoption of robotaxis and software services. Drawing parallels, the analysts likened the potential impact of Dojo at Tesla to the transformative role played by Amazon Web Services in bolstering Amazon’s profitability significantly.
The analysts acknowledged the ongoing debate over whether Tesla should be classified as an automotive or technology company. However, they asserted that the most substantial value driver going forward would be the revenue generated from software and services. The note elaborated on Dojo, Tesla’s in-house supercomputer, which has been in development for approximately five years. Its primary purpose is to train AI systems for complex tasks, including enhancing Tesla’s driver-assistance system Autopilot and advancing its “Full Self-Driving” initiatives.
According to Morgan Stanley, Dojo has the potential to create “new addressable markets that extend well beyond selling vehicles at a fixed price.” They also highlighted the significance of Tesla’s upcoming release of the latest version of its full self-driving system, expected by the end of the year, and Tesla’s forthcoming AI day, anticipated in early 2024 (though the date has not been officially announced).
Tesla’s shares have already doubled in value since the beginning of the year, although they remain below the all-time intraday high of $414.50 achieved in November 2021. As of the market’s closing on Friday, the world’s most valuable carmaker held a market capitalization of approximately $788.74 billion.