Morgan Stanley has revealed a list of global stocks it likes, with four of them providing parts for Tesla ‘s supercomputer system. Called Dojo, the system has revolutionized the AI chip industry, the analysts said in a Sept. 12 note, and is said to result in “significant efficiencies and 6x cost savings.” Morgan Stanley says its list of tech stocks are “well-positioned for US hyperscalers’ acceleration of custom chip design,” especially since custom chips are expected to outgrow the AI graphics processing units in the long term. More aggressive AI custom chip designs are supposedly being developed by big technology companies to improve the performance and efficiency of running large neural networks. Powering Tesla’s Dojo In its research note, Morgan Stanley pointed out that Taiwan Semiconductor Manufacturing Company is the wafer foundry vendor for Tesla’s Dojo 1 (D1) and Dojo 2 (D2). The analysts reiterated their overweight position on TSMC at 718 Taiwanese dollars ($22.47), giving it a 32% upside from its price on Sept. 12. Morgan Stanley raised their price target on AIchip to 2,880 Taiwanese dollars, a 14% upside from its Sept. 12 price. The company “provides part of the design service [for] Dojo 1 and generates 5% of its revenue from this project,” the analysts wrote. Korean electronics manufacturer Samsung received an overweight rating from the bank for “winning projects in HBM (high bandwidth memory)” and being “the key foundry supplier for Tesla’s FSD (full self-driving) chip”. Samsung supplies 32GB of high-bandwidth memory to work with the Dojo interface processor, the analysts said. They have priced the stock at 95,000 Korean won ($71.45), giving it a 35% upside from its Sept. 12 price. Morgan Stanley also likes Nvidia since “Tesla still expects Dojo to operate alongside NVIDIA GPUs – and there are also non-hyperscalers customers needing AI GPU”. The bank is overweight on the stock and has given it a price target of $630 – a 39% upside from its $451.78 price on Sept. 12. New stock on the radar Taiwanese semiconductor company MediaTek was also added to Morgan Stanley’s list of global technology stocks, with an upgrade to “overweight” from “neutral.” The analysts pointed out that the company “should leverage sufficient and cheaper engineering resources to secure one of Google’s TPU (tensor processing units projects, which should contribute 2% of its (forecast) 2025 revenue and trigger a stock re-rating as the company diversifies away from its smartphone-centric business to AI.” The company was given a target price of 888 Taiwanese dollars, giving it a 21% upside from its price of 728 on Sept. 12. — CNBC’s Michael Bloom contributed to this report.
