Morgan Stanley's Favorable Outlook on Tech Stocks Supplying Tesla's Supercomputer
Morgan Stanley has recently shared its positive stance on a list of global stocks, with four of them being key suppliers for Tesla's supercomputer system, known as Dojo. According to analysts, Dojo has brought about a revolution in the AI chip industry, resulting in significant efficiencies and cost savings. Morgan Stanley believes that these tech stocks are well-positioned for the acceleration of custom chip design by US hyperscalers, particularly as custom chips are expected to outgrow AI graphics processing units in the long term.
Powering Tesla's Dojo
Morgan Stanley's research note highlights Taiwan Semiconductor Manufacturing Company (TSMC) as the wafer foundry vendor for Tesla's Dojo 1 (D1) and Dojo 2 (D2). The analysts maintain an overweight position on TSMC, projecting a 32% upside from its price on September 12. Additionally, Morgan Stanley has raised its price target on AIchip, a company that provides part of the design service for Dojo 1 and generates 5% of its revenue from the project. Samsung, a key foundry supplier for Tesla's FSD (full self-driving) chip, has also received an overweight rating from the bank. Samsung supplies 32GB of high-bandwidth memory for the Dojo interface processor and is expected to see a 35% upside from its September 12 price.
Positive Outlook on Nvidia and New Addition to the Radar
Morgan Stanley also expresses a favorable view on Nvidia, as Tesla continues to expect Dojo to operate alongside Nvidia GPUs. The bank is overweight on Nvidia and has set a price target of $630, indicating a 39% upside from its September 12 price. Furthermore, Taiwanese semiconductor company MediaTek has been upgraded from "neutral" to "overweight" on Morgan Stanley's list of global technology stocks. The analysts believe that MediaTek, with its sufficient and cheaper engineering resources, is well-positioned to secure one of Google's TPU projects. This diversification away from its smartphone-centric business towards AI could trigger a stock re-rating. MediaTek has been given a target price of 888 Taiwanese dollars, representing a 21% upside from its September 12 price.
In conclusion, Morgan Stanley's positive outlook on tech stocks supplying Tesla's supercomputer reflects their belief in the potential of custom chip design and the growth of AI applications. The bank's favorable stance on TSMC, Samsung, Nvidia, and MediaTek highlights their confidence in these companies' ability to capitalize on the expanding AI market and contribute to the advancement of Tesla's Dojo system.
Conclusion: Implications of Morgan Stanley's Tech Stock Outlook for New Businesses
Morgan Stanley's positive stance on tech stocks supplying Tesla's supercomputer, Dojo, offers a "hot take" on how such market trends can impact new businesses. The key takeaway is that the growth of AI applications and the potential of custom chip design can present significant opportunities for new businesses in the tech sector.
Recognizing the Potential of AI and Custom Chip Design
New businesses, particularly in the tech sector, should note the potential of AI applications and custom chip design. These areas are expected to outgrow traditional AI graphics processing units in the long term, presenting significant opportunities for growth and innovation.
Strategic Planning for New Businesses
New businesses should consider these trends in their strategic planning. By focusing on AI applications and custom chip design, they can position themselves well for the future and capitalize on the expanding AI market.
In conclusion, Morgan Stanley's favorable outlook on tech stocks supplying Tesla's supercomputer highlights the potential of AI applications and custom chip design for new businesses. By recognizing these trends and incorporating them into their strategic planning, new businesses can position themselves for success in the rapidly evolving tech sector.