Tesla stock jumps after Morgan Stanley predicts supercomputer Dojo could drive a car

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Attendees inspect Tesla electric vehicles during the Electrify Expo in DC on July 23, 2023 in Washington, DC.


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Tesla’s Dojo supercomputer could lead to a $500 billion jump in the electric car maker’s market value, analysts at Morgan Stanley said in a note on Monday.

Tesla shares jumped more than 6% during early trading Monday morning, on the heels of a rosy prediction from the Morgan Stanley team about the automaker’s supercomputing efforts. The Morgan Stanley team, led by longtime Tesla analyst Adam Jonas, has predicted that a massive rise in value could come from the dojo potentially opening up new revenue streams through broader adoption of taxis and software services.

Analysts compared Tesla’s Dojo potential to “the same forces that drove” Amazon Web Services to push Amazon’s profitability to new heights.

Investors have long debated whether Tesla is a car company or a technology company. We think it’s both, but we see the biggest driver of value here as software and services revenue.

Dojo, an internal supercomputer that has been working at Tesla for about five years, is designed to train AI systems to complete complex tasks such as assisting Tesla’s driver-assistance system’s Autopilot as well as help drive “full self-driving” efforts.

Morgan Stanley analysts see Dojo as being able to open up “new addressable markets that extend beyond selling vehicles at a fixed price.”

The analysts added that the latest version of Tesla’s full self-driving system (expected to be unveiled at the end of the year) and Tesla’s next AI Day (expected in early 2024, but not yet announced) will be “worth watching.”

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Tesla shares have more than doubled since the beginning of the year, but they are still far from the all-time intraday high of $414.50 set in November 2021. The market value of the world’s most valuable automaker was about $788.74 billion as of the market close on Friday.

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