New Dojo Self-Driving Supercomputer Expected to Boost Tesla's Value: What Other Growth Drivers Lie Ahead?

The potential of the supercomputer was cited as the primary reason for the upgrade by Morgan Stanley, and this news may have contributed to the surge in Tesla's share price.

Will Tesla's AI-focused initiatives drive sustained growth for the company's stock price in the long run, or are there other factors that investors should be considering?

Morgan Stanley Predicts $500 Billion Growth in Market Value for Tesla through Dojo Supercomputer Project.

Tesla's shares surged after Morgan Stanley analysts released an optimistic note on Monday, predicting that the company's Dojo supercomputer project could fuel a massive growth in market value. According to the report, Tesla's development of custom silicon for the supercomputer will have applications beyond just the development of full self-driving capabilities. The note went on to indicate that Dojo could result in new revenue streams for products like robotic taxis and other software services, potentially driving a $500 billion growth in market value.

The Dojo supercomputer is designed to handle vast amounts of data in training driving systems, giving Tesla what Morgan Stanley analyst Adam Jonas described as "an asymmetric advantage" in a market that could be worth up to $10 trillion. The next version of Tesla's full self-driving system, expected later this year, and the company's potential Artificial Intelligence Day in 2024 are worth watching closely, he added. With Dojo, Tesla may be well-positioned to become an AI-as-a-service provider to automakers that need FSD capabilities, further solidifying its position in the market.

As the United Auto Workers' (UAW) current agreement with the major automakers in Detroit is set to expire this Thursday, Tesla's lead in the US electric vehicle space could become even more pronounced. If a strike were to occur, GM, Ford, and Stellantis could see their EV roadmaps pushed out as far as 2024, according to Wedbush's Dan Ives. This would give Tesla a significant advantage, particularly given its ability to sell affordable vehicles and undercut competitors on price.

The potential strike would also impact vehicle inventories, cutting production by 150,000 units every week according to analyst Garrett Nelson with CFRA. With inflation already causing consumers to cut expenses, an increase in prices for cars could compound the effects and further weaken major automakers' positions relative to Tesla.

Tesla China's delivery estimates for the Model Y Long Range have been extended to between 6 to 8 weeks, up from the previous estimate of 2 to 6 weeks. The Model Y RWD and Performance variants still have an estimated delivery window of 2 to 6 weeks. The news comes after Tesla reduced prices for the Model Y Long Range and Performance in China last month. Despite the longer wait times, Tesla's Made-in-China (MIC) cars saw a solid 9.3% increase in wholesale vehicle shipments in August compared to the same period last year, according to the China Passenger Car Association.

In addition, Tesla is gearing up to export a large shipment of its latest Model 3 variant, the Highland, to various markets in Asia, Europe, the Middle East, and Canada. Drone footage captured outside Tesla's Gigafactory Shanghai plant shows an expansive collection of Model 3 Highland units ready for shipment, with deliveries set to begin in October. Shanghai has played a significant role in meeting demand for Tesla's Model 3 globally, serving as a key production hub for the company.

While market consensus expects Tesla's Q3 deliveries to remain consistent with Q2, Deutsche Bank analyst Emmanuel Rosner warns that this forecast carries downside risks, reflecting planned summer production shutdowns which will push both production and deliveries down QoQ, discounts on inventories, and limited positive costs offsets.

Tesla's highly anticipated Cybertruck, which boasts impressive specs like up to 804km of range and a towing capacity of over 6300kg, has been eagerly awaited by US customers who have pre-ordered the electric pickup.

However, the vehicle's launch may face further delays due to production standards. A leaked internal email from Tesla's CEO Elon Musk revealed that the company is seeking to design and build the Cybertruck to "sub 10-micron accuracy," a demand that manufacturing experts consider almost impossible to achieve at this stage of production.