EV major Tesla (NASDAQ: TSLA) was on an upswing in pre-market trading on Monday after top-rated Morgan Stanley analyst Adam Jonas upgraded the stock to a Buy from a Hold and gave a “top pick” designation to the stock. Jonas also raised the price target to $400 from $250 on the stock. The analyst’s price target is the highest on the Street and implies an upside potential of around 61% at current levels. Jonas’ price target implies a market capitalization of around $1.39 trillion for the EV giant.
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The explanation for Jonas’ bullish stance on TSLA stems from its Dojo supercomputer that could open up new markets for the company that “extend well beyond selling vehicles at a fixed price.” By the analyst’s estimate, the total addressable market for the supercomputer could be $10 trillion.
The analyst commented, “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.”
Tesla has started production of Dojo, which will be used to train artificial intelligence (AI) models for self-driving cars in July, and intends to spend in excess of $1 billion on Dojo through next year.
Besides Jonas, other analysts, however, remain sidelined about TSLA stock with a Hold consensus rating based on 11 Buys, 13 Holds and five Sells.
