Tesla (TSLA) shares surged after a significant upgrade from prominent Wall Street analyst Adam Jonas, who cited the transformative potential of Tesla’s ‘DoJo’ supercomputer. Morgan Stanley’s Adam Jonas raised his Tesla price target by 60%, setting it at $400 per share the highest on Wall Street. This boost comes as Tesla’s DoJo supercomputer, driven by artificial intelligence (AI), stands to reshape the automaker’s future, potentially adding billions to its market value “through a faster adoption rate in Mobility (robotaxis) and Network Services (software as a service).
Elon Musk, Tesla’s CEO, envisions DoJo not only supporting Tesla’s drive toward autonomy but also licensing its full self-driving (FSD) technology to major automotive rivals. With data from 300 million miles of driving and plans to scale up, Tesla aims to establish a significant competitive edge. This technological prowess positions Tesla as a leader in both the automotive and tech sectors, fueling debates about the company’s true identity.
“Investors have long debated whether Tesla is an auto company or a tech company,” Jonas wrote. “We believe it’s both but see the biggest value driver from here being software and services revenue. The same forces that have drive [Amazon Web Services] to reach 70% of Amazon earnings can work at Tesla opening up new addressable markets that extend well beyond selling vehicles at a final price.”
Tesla’s supercomputing architecture, powered by custom silicon, grants it an advantage in the burgeoning $10 million market for autonomous driving technology, solidifying its status as a tech powerhouse in the auto industry.
Munster, an analyst at Deepwater Asset Management, is optimistic about the licensing potential of Tesla’s FSD technology. He predicts annual revenue of up to $20 billion within five years of the first agreement. Furthermore, a 10% market share could generate a staggering $100 billion in operating income. Munster suggests that if Tesla successfully secures one original equipment manufacturer (OEM), it could set off a domino effect, with other automakers following suit. This scenario echoes the recent trend of multiple automakers joining Tesla’s charging network, signaling the attractiveness of Tesla’s innovations.
Elon Musk, known for setting ambitious goals, remains resolute in his belief that Tesla will achieve full self-driving capabilities soon. “I’ve been wrong in the past. I may be wrong this time (but) I think we’ll be better than human by the end of this year,” Musk said. “We see a clear path to full self-driving being 10 times safer than the average human driver.”
Musk’s optimism underscores the company’s relentless pursuit of autonomous driving technology and its potential to revolutionize road safety. If Tesla can deliver on this promise, it would not only boost the company’s reputation but also accelerate the adoption of autonomous vehicles on a global scale.
The upgrade from Morgan Stanley’s Adam Jonas has put Tesla in the spotlight, emphasizing the pivotal role of the DoJo supercomputer and the potential of FSD licensing. Tesla’s transformation into a hybrid tech-auto company has sparked excitement among investors and analysts alike. With billions of miles of driving data and a unique position in the autonomous driving market, Tesla is poised to reshape the automotive industry.
