Tesla Inc (NASDAQ:TSLA), stock fell 0.50% (As on September 12, 11:36:10 AM UTC-4, Source: Google Finance) after Morgan Stanley upgraded the company to Overweight from Equalweight and raised its price target to $400 from $250. The analysts said that they believe Dojo, a dedicated supercomputer, has the potential to increase Tesla’s enterprise value by as much as $500B through accelerated adoption in Mobility (robotaxi) and Network Services (SaaS). To improve the FSD system’s efficacy, says the analysts, Tesla needs to address challenges related to data collection, processing power, speed, efficiency, and scalability. And they say Dojo is designed to meet these challenges by providing the computational power necessary to process extensive real-world data from Tesla’s vehicles. The firm also named Tesla its Top Pick. The analyst envisioned Tesla selling AI technology to other automakers, and saving money by using its own GPUs as much as possible, rather than paying for chip supply from Nvidia.
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.
Highly bullish Tesla analyst Adam Jonas wrote in his note, “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.