Tesla stock: Shares rise on Morgan Stanley upgrade, citing ‘internet of cars’ as a real opportunity
Tesla experienced a substantial rally, with its stock price surging by about 10% to reach nearly $274, marking its highest level since July 19. This significant one-day gain, the largest since January, was propelled by an upgrade from Morgan Stanley. The investment firm raised its rating for Tesla from “hold” to “buy” and increased its price target from $250 to $400.
The primary driver behind Morgan Stanley’s bullish outlook is Tesla’s Dojo supercomputer, an artificial intelligence network designed for training self-driving vehicles using video data. Analysts estimate that Dojo could potentially add $500 billion in enterprise value to Tesla, which currently boasts an $800 billion market capitalization. This upgrade positions Tesla as a formidable player in the software-as-a-service market, extending its revenue beyond vehicle sales.
Notably, this optimistic outlook has made Morgan Stanley’s price target the highest among all analysts tracked by FactSet, foreseeing Tesla reaching its highest split-adjusted level since January 2022.
As a result of this surge, Tesla gained an impressive $79.9 billion in market capitalization, surpassing Berkshire Hathaway to become the world’s seventh-most valuable company. Morgan Stanley’s Adam Jonas even speculates that Dojo could play a central role in Elon Musk’s other ventures, such as the social media company X and aerospace company SpaceX.
Despite a strong year-to-date performance, with Tesla shares up over 100%, the stock remains down approximately 35% from its pandemic peak. However, this recent rally underscores the growing importance of AI and autonomous driving technology in Tesla’s future growth.
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