Morgan Stanley upgrades Tesla price target, but not all brokers agree

Tesla Inc. (TSLA) is making significant strides in the realm of artificial intelligence (AI) and machine learning, with CEO Elon Musk announcing an ambitious plan to invest over $1 billion in a project named Dojo by the end of 2024. This initiative is aimed at revolutionizing the way Tesla's cars and emerging robotics division operate.

What is Tesla’s Dojo?

Dojo is being developed as a high-powered tool to assist with AI machine learning and computer vision training purposes for Tesla's vehicles and emerging robotics division. The project looks to leverage technology to continually improve its product line.
Tesla's use of AI is not a new development. The company has been harnessing the power of AI and machine learning to refine and enhance its existing software and to create new features.

One of the unique approaches Tesla employs involves using video clips and data from its customers' vehicles. This innovative method allows Tesla to gain real-time insights into how its vehicles are performing on the roads, enabling the company to make necessary adjustments to its software and hardware.

For instance, if a particular model is consistently showing a specific issue under certain driving conditions, this data can be used to adjust the AI algorithms, leading to improved performance and potentially preventing the issue from recurring. This proactive approach to improvement and innovation is part of what sets Tesla apart from its competitors.

As the project advances, it's expected to provide a significant boost to Tesla's technological capabilities, potentially leading to even more advanced and efficient vehicles and robotics.

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Morgan Stanley ratings upgrade

Tesla's planned investment in Dojo represents an exciting development in the world of AI and machine learning and has caught the attention of Morgan Stanley.

Morgan Stanley has revised its price target for Tesla shares, setting a new goal at $400, a significant revision on the previous $250 price target. This adjustment, effective as of Monday, underscores the potential of Tesla's (TSLA) Dojo supercomputer project and custom silicon. Morgan Stanley suggests that the Dojo project could potentially add a staggering $500 billion to Tesla's long-term company value.

Broker / analyst ratings

Not all brokers tend to have the same viewpoint at Morgan Stanley. A Refinitiv poll of 45 analysts / brokers, as of the 12th of September 2023, sees most having a long-term hold rating on Tesla stock. A mean of these analysts’ long-term targets for the share arrives at a price of $241.12, roughly a 12% premium to the closing price of Tesla on the 11th of September 2023.

Tesla – Technical View

The long-term trend for the Tesla share price remains up. In the near term we have seen a break higher with a strong close above the 259.50 level. The short-term move has however pushed the price into overbought territory.

Trend followers might prefer keeping a long bias to trades on Tesla, waiting for a pullback from overbought territory for entry, with 282.50 and 299.30 longer term upside resistance targets.