Artificial Intelligence (AI) continues to be the market lightning rod of the moment, with Tesla (NASDAQ:TSLA)'s stock undergoing an AI-boosted upswing and a Morgan Stanley (NYSE:MS) assessment suggesting the company's worth may climb above the $1.2 trillion mark.
The financial firm credits this bullish outlook to Tesla's funding in its Dojo AI platform, developed to advance autonomous driving.
Video data to boost machine learning
Tesla has publicly committed to allocating more than a billion US dollars to develop Dojo, a potent computing ecosystem equipped with tailor-made microchips. This system has the computational prowess to analyse vast quantities of video data acquired by Tesla cars.
With a beta version of the Full Self-Driving feature already in circulation among some North American Tesla owners, the tech megacap’s CEO Elon Musk expects these vehicles to evolve into autonomous "robo-taxis" in the near future.
Morgan Stanley says that the Dojo AI technology is likely to give Tesla a distinct edge in comparison to industry adversaries. Musk has previously anticipated a faster launch timeline for autonomous Teslas and now insists that such technologies are vital to augmenting the cars' overall worth.
Tech giant or automotive manufacturer?
As electric vehicle technology gains wider acceptance, notably in the Chinese market, Musk is increasingly emphasising AI innovations.
Morgan Stanley's financial models predict that Tesla’s share value could leap from its current $248.50 to $400, boosting its market capitalisation from today's $789 billion to a projected $1.27 trillion.
Under more optimistic conditions, the company’s worth could escalate beyond $1.7 trillion.
Despite the company facing regulatory inquiries, particularly related to its Autopilot feature, Tesla remains committed to AI advancements.
The financial analysts note that Tesla straddles the line between an automotive manufacturer and a tech firm, with the lion's share of future value likely coming from its software and services.
Following these projections, Tesla's market value saw a more than 9% surge, pushing it to an estimated $850 billion.