Tesla’s Dojo supercomputer could boost company’s value by R9.5 trillion

According to Morgan Stanley, Dojo supercomputer by Tesla Inc. can possibly add as much as $500 billion (R9.5 trillion) to the company’s market value through faster adoption of robotaxis and network services.

Writing in a note, analysts including Adam Jonas and Daniela M Haigian said Dojo can open up “new addressable markets,” just like AWS did for Amazon.com Inc., upgrading the stock to overweight from equal-weight and raising its 12-month price target to a Street-high $400 per share from $250.

The high tech motoring company has already more than doubled this year and closed at $248.50 on Friday.

The supercomputer is designed to handle massive amounts of data in training driving systems, and it may put Tesla at “an asymmetric advantage” in a market potentially worth $10 trillion, and also has the possibility to make software and services the biggest value driver for Tesla from here onward.

The next version of Tesla’s full self-driving system, expected by year-end, and the company’s Artificial Intelligence day in early 2024 are worth watching, they added. The company has been talking about how Dojo gives it an edge in AI and self-driving technology since at least 2021.

CEO Elon Musk told investors that the carmaker plans to invest more than $1 billion on the project by the end of 2024 back in July this year.

That base-case target from Morgan Stanley would put the stock near its record close of $409.97 in November 2021. That makes the firm a notable outlier: The average price target among analysts tracked by Bloomberg is $268.42.

“The more we looked at Dojo, the more we realised the potential for underappreciated value in the stock,” the Morgan Stanley analysts said.