TSLA Price Upgraded To $400 By Morgan Stanley 🚀
Morgan Stanley analyst Adam Jonas envisions Tesla Inc‘s (NASDAQ:TSLA) custom supercomputer, Dojo, as a game-changer that could unlock new markets for the electric vehicle (EV) giant and catapult its enterprise value by a staggering $500 billion.
Jonas has upgraded his rating on Tesla from ‘equal-weight’ to ‘overweight,’ boosting the price target by 60% to $400, the highest right now among Wall Street analysts.
Jonas estimates that Dojo could generate approximately $6.5 billion in cost savings for Tesla over the next couple of years, based on Tesla’s claim of achieving six times the cost savings. Additionally, Tesla has assembled a team of engineers for Dojo, recruiting talent from industry heavyweights such as AMD, Digital, IBM, Apple, Nvidia, and Samsung.
Jonas believes that similar to how Amazon Web Services contributes significantly to Amazon’s earnings, Tesla Network Services could represent over a third of the company’s total EBITDA by 2030. This share is anticipated to double, exceeding 60% of the group’s EBITDA by 2040. “In our view, once Tesla makes headway on autonomy and software, third-party Dojo services can offer investors the next leg of Tesla’s growth story,” he added.
Elon Musk has committed to investing over $1 billion in the Dojo Supercomputer by the end of 2024. However, Tesla will continue to rely on Nvidia for computing needs.
"Training compute should soon not be so much of a limiting factor," Musk said in August.
Jonas is not alone in recognizing Dojo’s potential. Analysts at Ark Investment Management, led by Cathie Wood, identified Dojo as one of the three key drivers of Tesla’s growth, alongside robotaxis and full self-driving capability. They emphasized that, considering Nvidia’s inability to supply sufficient GPUs to meet Tesla’s requirements, the investment in Dojo will yield significant returns over time.
⚠️ Trading tips: looking at calls above 263.24 and puts below 259.85 on Monday. Beware of profit taking to bring the price back down from the pump and dump with no buyers leading to CPI’s uncertainty.
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