Tesla Is Axing Its Dojo Supercomputer Plans. What Does That Mean for TSLA Stock Here?

Tesla (TSLA) shares sit comfortably in the green on Monday following reports its billionaire chief executive, Elon Musk, has terminated the company’s Dojo supercomputer initiative. 

Moving forward, the company will lean more on partnerships with the likes of Nvidia (NVDA) and Samsung for chip manufacturing and inference capabilities.

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Tesla stock has regained much of its previously lost ground over the past four months. At the time of writing, it’s up well over 50% versus its year-to-date low set on April 8. 

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Why Scrapping Dojo Is a Positive for Tesla Stock

Tesla’s decision to abandon the Dojo program is a positive for the EV stock as it signals a strategic pivot toward efficiency and scalability. 

By leaning on proven partners like Nvidia and Samsung, the automaker stands to avoid high costs and risks of in-house chip development while accelerating access to cutting-edge AI hardware. 

Scrapping the aforementioned project will enable TSLA to focus resources on its core AI5 and AI6 chips, streamlining its tech roadmap and boosting investor confidence in its execution. 

Note that Tesla’s deal with Samsung in late July and its massive Nvidia GPU deployment reinforces its commitment to robust AI infrastructure without overextending internally. 

Together, all of it could unlock material further upside in TSLA shares in the back half of 2025. 

Morgan Stanley Sees Upside in TSLA Shares to $410

According to Morgan Stanley’s senior analyst Adam Jonas, the Dojo announcement is constructive as it will help meaningfully lower AI-related costs for the electric vehicle behemoth. 

In his research note on Monday, Jonas said scaling back Dojo could clear the way for an expanded collaboration between TSLA and xAI as well. 

Meanwhile, improved GPU supply dynamics make external partnerships with the likes of NVDA and Samsung more viable, he added. 

Morgan Stanley’s $410 price target on Tesla shares translates to another 18% upside from here. 

Wall Street Disagrees with Morgan Stanley on Tesla

Investors should note that other Wall Street firms don’t share Morgan Stanley’s optimism on TSLA shares. 

The consensus rating on Tesla stock currently sits at “Hold” only with the mean target of roughly $300 indicating potential downside of about 13% from current levels.  

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On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.