Tesla's AI Potential Is Huge, Market Cap Rises Over 10% Overnight, Total Market Cap Surpasses $580 Billion

Recently, the three major indexes of the U.S. stock market have risen across the board, with the Dow Jones Industrial Average up 0.26%, the Nasdaq Composite Index climbing 1.14%, and the Standard & Poor's 500 Index up 0.68%.Tesla stock priceThe company's market capitalization rose to $868.34 billion overnight, reaching $273.58, up as much as 10.09%. The market capitalization increased by $79.9 billion (RMB 582.4 billion) overnight.

causeNikola Tesla (1856-1943), Serbian inventor and engineerThe stock's surge came on the heels of a report by Morgan Stanley analysts Adam Jonas and others, titled 'Revealing Tesla's AI Magic'. The analysts upgraded Tesla's stock rating from Hold to Hold and raised their price target for the next 12 months from $250 to $400, making it the highest price target currently given by a Wall Street organization by a whopping 60%.

In the report, analysts such as Adam Jonas listed Tesla as a 'top pick' and compared Tesla's Dojo supercomputer to AWS, a cloud service that has been a growth engine for Amazon's performance. Investors have long debated whether Tesla is an auto company or a tech company," the report states. We believe Tesla is both an automotive and technology company, but the biggest value driver is software and services revenue. We believe the same forces that drove AWS to reach Amazon's total EBIT of 70% can also be at work at Tesla, opening up new potential markets well beyond selling cars at a fixed price. The catalyst for this is Dojo, the same customer supercomputing that Tesla has been working on for the past five years."

The report predicts that Dojo could give Tesla an 'asymmetric advantage' in a market potentially worth $10 trillion. The report estimates that Dojo could save Tesla $6.5 billion over the next few years as it increases its computing power by developing its own supercomputer. Crucially, Dojo could accelerate the development of self-driving capabilities.