Analysts at Morgan Stanley suggest that Tesla’s in-the-works Dojo supercomputer could potentially accelerate the electric vehicle manufacturer’s market value by an astounding US$500 billion. This optimistic projection preceded a more than 6% rise in the company’s shares during early trading on Monday morning.
The anticipation stems from the belief that the Dojo supercomputer could pave the way for new revenue avenues through broadened use of robotaxis and software services. The potential of the Dojo at Tesla, in fact, draws close comparison to the transformative impact of Amazon Web Services (AWS) which has driven Amazon’s profitability to unprecedented levels.
This significant development once again sparked discussions among investors if Tesla should be classified as an automobile enterprise or a tech company. The Morgan Stanley’s team comprising of prominent Tesla analyst Adam Jonas, however, asserts that Tesla effectively is a unique amalgamation of both, but in their view, software and services revenue will herald the most value in the foreseeable future.
Work on the Dojo, a proprietary high-performance computer, has been ongoing at Tesla for approximately five years. Its purpose is to train AI systems to perform intricate tasks such as aiding Tesla’s driver-assistance feature, Autopilot, and furthering its “Full Self-Driving” progress.
The Morgan Stanley analysts anticipate that Dojo might actually breach into “new addressable markets that extend well beyond selling vehicles at a fixed price.” They encouraged investors to watch out for the unveiling of Tesla’s latest full self-driving system scheduled for the year-end, and Tesla’s next AI day, a yet-to-be-announced event expected in early 2024.
Despite Tesla’s shares having doubled since the year’s start, they have yet to regain the peak of $414.50 touched in November 2021. The automaker, currently the most valuable globally, posted a market cap of roughly $788.74 billion as of last Friday’s market close.