Morgan Stanley upgrades Tesla price target to $400 per share on potential of custom silicon.
Morgan Stanley analysts argued that Tesla should be viewed as a tech company as much as an electric car maker. The firm set its new price target at $400 for shares of Tesla, up from a previous price target of $250, as of Monday emphasizing the potential of Tesla's Dojo supercomputer project and custom silicon. Morgan Stanley believes Dojo could theoretically add up to $500 billion to the company's value long-term.
CEO Elon Musk said in July this year said Tesla planned to spend more than $1 billion on Dojo by the end of 2024. Tesla is developing Dojo to help with AI machine learning and computer vision training purposes for its cars and nascent robotics effort. Among other things, Tesla uses video clips and data from its customers' vehicles to improve existing software, and develop new features.Sign up for NBC LA newsletters.
Highly bullish Tesla analyst Adam Jonas wrote in his note on Monday,"Although Dojo is still early in its development, we believe that its applications long-term can extend beyond the auto industry. Dojo is designed to process visual data which can lay the foundation for vision-based AI models such as robotics, healthcare and security. 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.
Morgan Stanley also expects Tesla to be able to generate $2,160 in recurring revenue every month from its vehicle owners in 2030, from services enabled by Dojo and subscription software in cars like self-driving systems, which Tesla does not offer today, vehicle charging services, maintenance, software upgrades, content and others to be developed in the future.
Elon Musk promised a Tesla would complete a self driving cross-country demo without any human intervention by the end of 2017. Tesla vehicles still only offer advanced driver assistance systems, which require a human behind the wheel, ready to steer or brake at any second.
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