Share This Article
Morgan Stanley Upgrade Drives Tesla to $600 Billion: Dojo AI Boosts Automaker’s Surge
Tesla (TSLA) surged on Tuesday after Morgan Stanley upgraded the stock and predicted a possible $600 billion Dojo AI boost over the next three years.
The firm’s analysts upgraded Tesla to “Overweight” from “Equal Weight” and gave the stock a price objective of $540 – a 19% increase from Monday’s close.
The move was driven by Tesla’s ability to leverage its software and artificial intelligence (AI) capabilities to boost its electric vehicle (EV) and energy storage business, as well as its potential to monetize its Autopilot self-driving system.
Morgan Stanley likened Tesla to Apple when it launched the iPhone in 2007, noting that it could become an “end-to-end mobility and energy provider” in the same way Apple is now a full-fledged technology company.
The firm also believes Tesla can increase its AI operations by launching its Dojo deep learning computer in 2023, which could potentially add $600 billion to Tesla’s market cap.
“We expect that Dojo will become the ‘brains’ of Autopilot and will also be used to train the neural nets used in Tesla’s automated factories,” the Morgan Stanley analysts wrote. “We believe Dojo could potentially serve as a platform for a range of applications and services that could help Tesla monetize its Autopilot system.”
The firm also believes Tesla’s battery technology could be the key to the success of its EV business, noting that the company is “well-positioned to benefit from increased demand for electric vehicles, particularly in Europe.”
Tesla has been on a roll lately, with its stock rising more than 300% since the start of 2020 and its market cap surpassing that of traditional automakers. With Morgan Stanley’s bullish outlook and the potential for a $600 billion boost from its Dojo AI system, Tesla is likely to remain a hot commodity for investors.On Monday,
November 9th, Morgan Stanley raised its price target for Tesla, Inc. (TSLA) from $540 to $542 per share. This upgrade came on the heels of news that Dojo AI, a software company that specializes in developing AI applications, is going to join forces with Tesla. According to reports, Dojo plans to invest up to $600 billion in Tesla over a two-year period.
The news of this investment has caused shares of Tesla to surge. On the day of the announcement, the stock jumped to a new all-time high of $520 per share, a rise of nearly 6% from its close the previous day. This jump adds to Tesla’s already impressive 2021 performance. Since the start of the year, the stock has climbed more than 450%, making it the best-performing equity in the S&P 500.
The Morgan Stanley upgrade is just the latest sign of confidence in the electric vehicle maker. Analysts at the firm cite “impressive operational execution” as one of the key factors for their bullish price target. They believe that Tesla’s market capitalization could eventually reach $1.6 trillion, which would make it the most valuable auto company in the world.
Tesla has been experimenting with AI for several years. The company signed a deal with Nvidia in 2020 to develop chips for its vehicles, and it has been working with OpenAI to develop a self-driving system. The addition of Dojo AI could give Tesla the edge it needs to become an AI powerhouse.
The impressive run-up in Tesla’s stock has also made it one of the most-shorted stocks on the market. As of Monday’s close, there were more than $19 billion in short positions posted against the company. It will be interesting to see how these shorts respond to the news of the Dojo AI investment and the Morgan Stanley upgrade.
It is clear that Tesla has everything it needs to continue its incredible growth. With the backing of Dojo AI and the approval of Wall Street analysts, the company is well-positioned to maintain its status as a leader in the EV and AI space. Only time will tell if the $600 billion investment pays off, but with the current momentum behind the company, it seems likely that the stock will remain on an upward trajectory for the foreseeable future.