In a surprising turn of events, Tesla’s shares saw a significant rise of over 10% following an optimistic note from Morgan Stanley regarding the company’s future prospects. This upgrade not only envisioned the possibility of Tesla selling AI technology to other automakers but also highlighted the potential cost-saving benefits of utilizing its own GPUs instead of relying on chip supply from Nvidia. This article aims to explore the transformative nature of Tesla, positioning it not only as an electric car manufacturer but also as a technology company with immense growth opportunities.
Tesla’s Technological Advancements
Morgan Stanley analysts argue that Tesla should be considered as much a tech company as an electric car maker. This viewpoint is supported by the firm’s decision to raise its price target for Tesla shares to $400, up from the previous target of $250. The analysts emphasize the significance of Tesla’s Dojo supercomputer project and its custom silicon, which they believe could potentially add up to $500 billion to the company’s value in the long term.
One of the most notable projects underway at Tesla is the development of Dojo, a supercomputer designed to facilitate AI machine learning and computer vision training for its cars and robotics initiatives. This novel technology allows Tesla to utilize video clips and data from its customers’ vehicles to improve existing software and develop new features. The implications of Dojo extend beyond the auto industry, opening doors for applications in robotics, healthcare, and security. This expansion into various sectors could offer investors significant growth potential for Tesla.
The Future of Tesla’s Revenue
Morgan Stanley predicts that Tesla will be able to generate $2,160 in recurring revenue per month from its vehicle owners by 2030, leveraging services enabled by Dojo and subscription software. These services may include self-driving systems, vehicle charging services, maintenance, software upgrades, content, and more. While Tesla currently lacks certain self-driving capabilities, the firm believes that once the company makes progress in autonomy and software, third-party Dojo services could drive the next phase of Tesla’s growth story.
Challenges and Competition
Despite the positive outlook, it is crucial to acknowledge the potential risks faced by Tesla. Deutsche Bank, another firm bullish on Tesla, notes that the EV manufacturer may experience challenges in the third quarter, including planned production shutdowns, inventory discounts, and limited positive cost offsets. These factors could potentially impact Tesla’s production and deliveries. Furthermore, Tesla’s recent price cuts on its electric vehicles and its premium driver assistance system, Full Self-Driving (FSD), have also affected its share price in recent weeks.
Considering the progress Tesla has made and its vision for the future, it is evident that the company is not just an electric car manufacturer but a technology trailblazer. The growing significance of Dojo and Tesla’s involvement in AI, machine learning, and computer vision highlight its transformation into a tech company that sets itself apart from traditional automakers. As Tesla expands its offerings and explores new avenues for growth, investors and stakeholders eagerly anticipate the potential rewards that lie ahead.
Tesla’s recent surge in share price following Morgan Stanley’s optimistic note signifies a significant shift in how the company is perceived. Tesla’s ongoing investments in groundbreaking technologies like Dojo and its unique position at the intersection of automobiles and AI solidify its standing as a tech company. While challenges and competition are prevalent, Tesla’s unwavering commitment to innovation and its ability to adapt will likely position the company for long-term success.
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