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Tesla (NASDAQ: TSLA) received a 60% price target increase from Morgan Stanley. According to analysts, the company's progress with the Dojo supercomputer is a major sign that Tesla is much more than a car company.

Morgan Stanley analyst Adam Jonas just made a new forecast for Tesla stock. He made a statement that thanks to the Dojo supercomputer, the manufacturer's shares are ready to reach a new high. The Tesla bull upgraded the stock from Equal Weight to Overweight. Morgan Stanley not only upgraded Tesla stock, but also named it a new “Top Pick” with an ambitious $400 price target. Markets quickly reacted to this move and in early trading, Tesla shares jumped 5.6% to $262.36.

The firm's analysts wrote that Tesla has developed an advanced supercomputing architecture called Dojo that could give the company an asymmetric advantage in a $10 trillion market. Jonas draws parallels with Amazon, whose cloud division AWS now accounts for 70% of the company's overall EBIT. He believes Dojo could increase Tesla's corporate value to $600 billion. This growth will likely be reflected primarily in the accelerated adoption of Tesla mobility solutions, including robotaxis, as well as the expansion of network services, software as a service (SaaS).

Dojo, Tesla's custom supercomputer, is key to the automaker's future. It is used to optimize and quickly train a Full Self-Driving (FSD) system. To maximize the effectiveness of the FSD system, Tesla must overcome many challenges, including data collection, processing power, speed, efficiency, and scalability. Dojo can overcome all these obstacles by providing the computing power to process massive amounts of real-world data from Tesla's fleet of vehicles. The company's supercomputer is an important step towards fully autonomous driving and improved road safety. According to Jonas, no one in the industry can offer anything like this.

© 2023, Eva Fox | Tesmanian. All rights reserved.

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This article is for informational purposes only. You should not construe any such information or other material as an investment, financial, or other advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, or offer by Eva Fox, Tesmanian, or any third party service provider to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction.

Eva Fox holds zero shares of Tesla, Inc., and currently (at the time of this article's publishing) holds zero options or securities in Tesla Inc. and/or its affiliates.