AUSTIN, Texas: This week, Morgan Stanley said that Tesla's Dojo supercomputer could increase the electric vehicle (EV) maker's market value by almost US$600 billion.
The computer will help facilitate the world's most valuable automaker's robotaxi and software service businesses.
In July, Tesla developed the supercomputer to train artificial intelligence (AI) models for self-driving cars.
For 2024, it plans to spend more than $1 billion on Dojo.
In a note released over the weekend, Morgan Stanley analysts led by Adam Jonas said, "Dojo can open up new addressable markets that extend well beyond selling vehicles at a fixed price."
"If Dojo can help make cars 'see' and 'react,' what other markets could open up? Think of any device at the edge with a camera that makes real-time decisions based on its visual field," they added.
Morgan Stanley subsequently upgraded Tesla's stock to "overweight" from "equal-weight."
Jonas noted that Dojo could drive the most value in software and services. He expects the unit to account for more than 60 percent of Tesla's core earnings by 2040, almost double from 2030.
"This increase is largely driven by the emerging opportunity we see in third-party fleet licensing, increased average monthly revenue per user (ARPU)," he said.
Morgan Stanley raised its revenue estimate for Tesla's network services business to $335 billion in 2040 from a previous $157 billion.