Tesla rallied to its highest share price in more than a month early Monday, riding an upgrade from Morgan Stanley touting a non-vehicle revenue stream which could justify a more than $1 trillion market capitalization for the Elon Musk-led firm.
Tesla's machine learning tech for its self-driving cars could unlock a massive SaaS opportunity for ... [+]
Tesla stock gained more than 6% to about $264 in morning trading, hitting its highest intraday level since August 1.
The spike comes after Morgan Stanley analysts led by Adam Jonas changed their rating for the electric vehicle stock from hold to buy, upping their price target from $250 to $400, per media reports.
Chief behind Morgan Stanley’s upgrade was its optimism for Tesla’s Dojo supercomputer, which Jonas estimated could add up to $500 billion in market value for Tesla, which currently has a market capitalization of about $800 billion.
Dojo, which is Tesla’s artificial intelligence technological network primarily designed to train its self-driving vehicles using video data, can help Tesla "extend well beyond selling vehicles at a fixed price" and become a power player in the lucrative software-as-a-service market, Jonas wrote.
Jonas and company’s price target is easily the highest among any analysts tracked by FactSet, predicting Tesla to hit its highest split-adjusted level since January 2022.
Musk told investors in July that Tesla will spend “well over” $1 billion on developing Dojo over the next year. “With Dojo, [Tesla]
Dojo is the “primary place where Tesla stands to benefit from the recent advances in AI,” but generating any revenue from selling the service to outside firms is likely a “considerably long-dated opportunity,” Barclays analysts led by Dan Levy wrote in June.
Musk, Tesla’s CEO and largest individual shareholder, is worth $261 billion, according to Forbes’ calculations. He’s by far the richest person in the world, worth more than $60 billion more than the next-richest man, LVMH chairman Bernard Arnault.