Tesla upgraded to Overweight from Equal Weight at Morgan Stanley

Morgan Stanley upgraded Tesla (TSLA) to Overweight from Equal Weight with a price target of $400, up from $250. The analyst views Tesla as both an auto and tech company but sees the biggest value driver from here being its software and services revenue. “The same forces that have driven” Amazon Web Services to reach 70% of Amazon’s (AMZN) total EBIT can work at Tesla, “opening up new addressable markets that extend well beyond selling vehicles at a fixed price,” the analyst tells investors in a research note. The firm says Dojo, Tesla’s custom supercomputing effort in the works for the past five years, is the catalyst. Morgan Stanley believes Dojo can add up to $500B to Tesla’s enterprise value, expressed through a faster adoption rate in mobility and network services. This drives the firm’s price target increase, the upgrade, and Tesla becoming the analyst’s top pick, replacing Ferrari (RACE).