ZINGER KEY POINTS
Adam Jonas's bullish Tesla view focuses on Dojo's non-auto potential; Gordon Johnson questions the analysis's impartiality.
Johnson has a $24 price target on Tesla and calls Monday's rally a short opportunity.
Gordon Johnson, founder and CEO at GLJ Research, called into question on Monday the optimistic analysis of Morgan Stanley's Adam Jonas on Tesla Inc.
Directly countering Jonas's high-flying projections rooted in the capabilities of Tesla's supercomputer, Johnson said the investment bank’s close ties to Tesla and Musk may have something to do with the upgrade, among other things.
The Morgan Stanley Analyst: Jonas on Sunday upgraded Tesla from Equal-Weight to Overweight with a $400 price target. The thesis centered around the transformative potential of Tesla's custom supercomputer, Dojo.
The analyst predicted a surge in Tesla's enterprise value from Dojo — to the tune of $500 billion.
Jonas's logic hinges on Dojo’s abilities beyond just the automotive realm, saying the supercomputer could find applications in diverse industries including robotics, healthcare and security.
Backing his thesis with figures, the Morgan Stanley analyst noted that just as Amazon Web Services became a cornerstone for Amazon.com, Inc.’s AMZN earnings, Tesla Network Services might contribute a sizable chunk — more than 60% by 2040 — to Tesla's EBITDA.
“Ninety-eight of their gross profit in Q2 was from selling cars,” Johnson said in a Schwab Network interview on Monday, “You and others have been saying this is a tech company for the last five years; where is the tech?”
The GL Research Analyst: Johnson has a $24 price target set on the stock.
Taking to X (formerly known as Twitter), he criticized the "poor analysis" of Jonas, noting Morgan Stanley's significant investment in Tesla and Twitter.
Johnson pointed out several concerns, saying Jonas admitted in his note that his projections on Dojo's cost and performance are unverified, rendering his upgrade largely speculative.
While the supercomputer, which is going to be used for training Tesla's machine learning models to improve its Full Self-Driving (FSD), went into production last month, Johnson noted Consumer Reports and Guidehouse Insights currently rank the driver assistance technology pretty low compared to competitors.
Johnson also noted Morgan Stanley’s role in Musk taking X private, as well as its sizeable position in Tesla.
Part of Musk's acquisition of Twitter was backed by bank loans, including a $3.5 billion contribution from Morgan Stanley. That connection, coupled with Morgan Stanley's ownership of nearly 28 million shares of Tesla, painted a picture of intertwined interests, according to Johnson, leading one to question the impartiality of the analysis.
Tesla shares traded more than 10% on Monday, which Johnson called a short opportunity.
TSLA Price action: Shares of Tesla closed 10.09% higher to $273.58 on Monday, according to data from Benzinga Pro.