Photo: Tesla
Tesla shares saw a rise in premarket trading on Monday, following Morgan Stanley’s optimistic take on the electric vehicle company’s potential in artificial intelligence.
Adam Jonas, an analyst at Morgan Stanley, has shifted Tesla’s stock rating from “equal weight” to “overweight”, primarily due to Tesla’s AI supercomputer, Dojo. Furthermore, Jonas increased his price estimate for Tesla shares from $250 to a Wall Street-leading $400, based on a survey from FactSet encompassing 44 analysts.
This surge led to a 5.7% increase in Tesla’s stock value, reaching $262.37 in the early trade. If this trend persists, it may mark Tesla’s highest stock close since the end of July, reports Marketwatch.
The Morgan Stanley note, which incorporated this latest assessment, focused on the importance of scalable, innovative projects that the market hasn’t fully recognized yet. The team, led by Edward Stanley, believed that Tesla’s Dojo fits perfectly within this category.
Introduced as “Project Dojo” in 2021, Tesla designed it to accelerate the training of AI models for its autonomous driving technology. Training computers to control vehicles demands vast data, resulting in substantial energy consumption and capital expenses. Morgan Stanley’s analysis highlighted that by creating their customized computer chip and integrating it with specialized hardware and software, Tesla believes they can achieve a roughly sixfold increase in cost efficiency for every computing power unit.
Morgan Stanley distinguishes Dojo as a “moonshot” due to its claimed advancements that rival those of AI chip giant, Nvidia. According to the team, the true test will be in providing substantial evidence of these claims.
Notably, Dojo’s design allows Tesla to utilize both simulated and actual data to train its models, an essential feature for preparing vehicles for rare, unexpected scenarios. The analysis also suggests that Dojo could provide Tesla with opportunities beyond cars, including sectors like robotics, healthcare, and security. They predict that as Tesla progresses in autonomy and software, offering third-party Dojo services could present the next phase in Tesla’s expansion.
