Topline
Tesla’s stock price surged to its highest level in over a month on Monday following an upgrade from Morgan Stanley. The upgrade was based on the potential for Tesla’s non-vehicle revenue stream, which could lead to a market capitalization of over $1 trillion.
Tesla’s machine learning tech for its self-driving cars could unlock a massive SaaS opportunity for … [+]
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Key Facts
Tesla stock gained about 7% to about $265 in morning trading, hitting its highest intraday level since August 1.
Morgan Stanley analysts upgraded Tesla from hold to buy, raising their price target from $250 to $400.
Morgan Stanley’s optimism is based on Tesla’s Dojo supercomputer, which could add up to $500 billion in enterprise value for the company.
Dojo, Tesla’s AI network for training self-driving vehicles, could help the company expand into the software-as-a-service market.
Morgan Stanley’s price target is the highest among analysts, predicting Tesla to reach its highest level since January 2022.
Crucial Quote
“Dojo may have the capability to be the core of the ‘Muskonomy,'” said Adam Jonas of Morgan Stanley, suggesting that Tesla’s machine learning technology could extend to other companies led by Elon Musk.
Key Background
Tesla plans to invest over $1 billion in developing Dojo, its supercomputer for image and video processing. The company’s stock has performed well this year, but is still down from its pandemic peak.
Chief Critic
Barclays analysts believe that while Dojo is important for Tesla, generating revenue from selling the service to other firms may take a long time.
Forbes Valuation
Tesla CEO Elon Musk is the world’s richest person, with a net worth of $261 billion.
Further Reading
Tesla Stock Takes 10% Post-Earnings Dive-Here’s Why Some Say Its $820 Billion Valuation Is ‘Disconnected From Reality’
Tesla starts production of Dojo supercomputer to train driverless cars
