Market Commentary

Tesla Rallies as Morgan Stanley Sees More Upside

Abdul Rehman
6 Feb 2024 · 2 minutes read

According to Morgan Stanley (MS:US) analysts, Tesla's (TSLA:US) Dojo supercomputer has the potential to drive a substantial increase in the company's market value, potentially by as much as $600 billion

This could be achieved by accelerating the adoption of robo-taxis and Tesla's software services. The electric vehicle manufacturer's shares rose 7% on Monday in response to this report.

Tesla began production of the Dojo supercomputer in July, with plans to invest over $1 billion in it by the next year. The Dojo supercomputer has the capability to open up new markets beyond traditional vehicle sales, according to Morgan Stanley’s Adam Jonas.

"If Dojo can help make cars 'see' and 'react,' what other markets could open up? Think of any device at the edge with a camera that makes real-time decisions based on its visual field," he said in the report.

Morgan Stanley analysts also upgraded Tesla's stock rating from "equal-weight" to "overweight" and designated it as their "top pick". They also raised their target price for Tesla's shares by 60% to $400, which would result in an estimated market capitalization of approximately $1.39 trillion.

Congress members Ro Khanna, Michael Guest, Josh Gottheimer, and Mike Garcia were all trading TSLA shares in recent months. Most notably, Rep. Khanna disclosed in July that he bought $15,000 - $50,000 worth of Tesla shares on June 26, when the stock closed at $241.05.

Tesla shares are up 130% following Monday’s rally. The stock was seen trading at around $265 apiece on Monday, giving the EV maker a market capitalization of around $830 billion.