Morgan Stanley raises Tesla to its top pick and shares soar more than 6%

Morgan Stanley raises Tesla to its top pick and shares soar more than 6%

The strategists of Morgan Stanley they raised the target price of tesla, the electric vehicle company, at $400 per share, a sharp increase from $250 previously. Additionally, they upgraded their ‘hold’ recommendation to ‘overweight‘, further supporting the value of the company of Elon Musk.

In a move that reflects his confidence in Tesla, Morgan Stanley added the company to its coveted list of Top Picks‘.

As a result of this news, the shares of Tesla experience an increase of more than 6.3% in the pre-opening market Wall Street.

Tesla: why the improvement by Morgan Stanley is due

The catalyst behind this improvement is dojothe new machine learning supercomputer developed by tesla, which opens new doors to previously unexplored markets. “Investors have long debated If Tesla is an automotive or technology company. We believe it is both, but we see that the main value drivers are software and services“explained Adam Jonas, analyst at Morgan Stanley.

Jonas also suggests that the same force that has driven AWS (Amazon Web Services) to represent 70% of Amazon’s total EBIT could be replicated at Tesla thanks to Dojo.

“In our opinion, Tesla is opening up new opportunities that go far beyond selling vehicles at a fixed price“Jonas added.

dojo is a supercomputer specialized in visual data processing and machine learning, designed for autonomous operations in vehicles, factories and humanoid robots. This puts Tesla in the same league as major players like Meta, Amazon and Microsoftwho have also developed their own proprietary IT solutions.

For Tesla, This could mean the early realization of autonomyan advance that is reflected in the update of the automotive equipment.

Tesla: long-term projections

Dojo highlights three key Tesla capabilities: speed, performance and costs. In the short term, we believe it will accelerate the development and monetization of Tesla’s software and services business,” the expert highlighted, emphasizing that Dojo could mark a significant change in the company’s market.

Long-term, Morgan Stanley sees potential for Dojo to open avenues for Tesla’s software and hardware capabilities extend far beyond the automotive industry.

In this sense, Morgan Stanley is betting that Dojo will increase monthly revenue per user (ARPU) of Tesla, which has led to an improvement in its projections. Now they predict that Tesla Network Services It will reach US$335,000 million in revenue by 2040, compared to US$157,000 previous millions. Furthermore, they expect this segment to account for more than a third of the company’s total EBITDA in 2030, doubling to more than 60% of the group’s EBITDA by 2040, compared to 38% previously.

Overall, Morgan Stanley’s improvement indicates optimistic outlook for Tesla’s future. The introduction of Dojo underscores the entity’s commitment to innovation and its determination to lead the electric vehicle industry.

Source: Ambito

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