This Changes *EVERYTHING* for Tesla Stock [TSLA].

but you know Carl my problem is is that

when you do it when you put a 500

billion dollar business uh when you say

it's going to be that we're not talking

about 2023 24 25 and the market works

and discounts out about a year but Jonas

does it out about three years he's out

of sync with both the economy and the

stock market so I didn't like this call

at all I like the hostess twink you call

more frankly I I hear you and listen

it's a wow Jim Cramer bags on Tesla

suggesting the market only prices out a

year and that this guy's going three

years out Jimbo is not realizing the

massive lack of institutional allocation

to Tesla and that you need to start

allocating now buddy to be part of oh my

gosh what what kind of poop is this Jim

I tweeted Jim Cramer says he does not

like slash agree with the Morgan Stanley

price Target hike so I wrote thank you

Jim Cramer this is extremely Tesla

because holy smokes Morgan Stanley

didn't they finally released a piece on

Tesla that's something that we've

actually been pointing out as many have

in the Tesla community that institutions

are just totally blind to and let's be

clear my opinion is that retail probably

already has a really good allocation to

Tesla with the exception of some of the

retail bearers who are keeping some cash

on the sidelines which is fine but I

think it's institutions who are

substantially underweight Tesla and they

move from institutions to properly

waiting Tesla in their portfolio would

lead to a violent upside in Tesla share

price

now we're going to go through what

Morgan Stanley just said and uh we'll

briefly touch on the United Auto Workers

strike basically uh if it goes through

this week it's probably going to be good

for Tesla we can talk more about that

really later but take a look at what I

tweeted uh just last week so uh last

week I tweeted the following uh on the

the eighth so about three days ago this

was a Friday and I tweeted the following

there's a reason 25 of my ETF which is

quite literally the legal maximum for my

type of fund is in Tesla I strongly

believe that Elon Musk is great not

perfect but means great now the Cyber

truck will dominate and become the most

popular truck globally and ever and that

Tesla and pool employees are smart

cutting the X and S prices was brilliant

they listened to our feedback it's

something a lot of us have been

complaining about that the S and X's are

just quite frankly too high the value

proposition difference isn't isn't that

high uh and uh that Tesla this right

here is a big one Tesla is the the only

highly profitable vision-based AI

solution to exist I made the argument

that I believe 99 of artificial

intelligence companies sorry 90 of

artificial intelligence companies will

be gone in two years and 99 will be gone

in 10 years and that Tesla will be a

Survivor here's that argument that I

made about institutional allocation to

Tesla being the lowest of all Mega caps

maybe that's because Elon is a bit nutty

but it's kind of my kind of nutty is

what I wrote uh and of course do I agree

with everything no but I think they're

going to do the best they can solar and

batteries are about to explode under the

inflation reduction uh credits and all

the bearish narratives fail to worry me

uh and somebody replied and said any

negatives I said rates beside that none

worthy I'll still believe this is true

well now on September 10th so uh

yesterday Morgan Stanley released this

massive piece uh and the the main writer

of this is someone who's written about

Tesla at length before uh they are

actually pretty good researchers like

this this is this is not just like uh

you know licking the finger and kind of

seeing which way the wind blows there's

actually some real logic in this uh and

what I really like is they go deeper

into one of the core ideas that I was

talking about in my tweet which was this

idea that a Tesla is the only highly

profitable vision-based AI solution to

exist

and this is really profound how they

break this down so uh on a high level

point of view uh they simply argue hey

look we think we're going to move Tesla

from our previous 250 dollar price

Target to 400 dollars uh now this is

just an Institutional price Target but

it's worth noting that's about a 60

increase in Tesla share price Tesla's

stock just because this analyst is also

respected at least in pre-market is

moving up six percent how much of this

will survive into the coming weeks and

otherwise will really depend on how much

institutional allocation changes because

of this of course there'll be some

algorithmic trading that goes into this

some retail trading that goes into this

in terms of a pre-market number but what

you're really waiting for is this this

explosion in Tesla shares that could

come from institutions finally waking up

and saying okay why are we underway

Tesla this is much more than a car

company and that's what they start off

with they talk about look you you know

how Amazon web services ended up driving

70 of the revenue at Amazon

we think something like that could

happen at Tesla as well and what's worth

noting about that is Tesla's revenues

from AI are really low right now

probably you know somewhere around less

than uh 20 certainly under 20 of Tesla's

total revenues coming from actual

artificial intelligence and recognizing

uh uh you know FSD revenues and it also

of course depends on which quarter

you're kind of looking at because

sometimes they recognize a little more

like I think q1 of this year they were

recognizing some more uh which which

maybe represented a larger percentage

but on an annual basis they're still

recognizing a very low percentage of

their revenues coming from FSD and we

know that FSC and autonomy are extremely

high margin and this really creates what

Morgan Stanley starts talking about this

this flywheel of profit basically for

Tesla and so we'll look at that in just

a moment but take a look at this Tesla's

management has talked about how they

need as much compute power as they can't

currently get their Hands-On because

they can't physically secure enough

chips to train the artificial

intelligence that they need and this

isn't to say that when when they go out

and buy as many Nvidia gpus as they can

it's not to say that their own in-house

designed application specific integrated

circuit Asic AI Asic is not good or

better than Nvidia it's just Tesla has

so much demand for computing uh Vision

based artificial intelligence data if

they need everything they can get their

hands on now to really get the release

of fsc12 out fsd12 by the way worth

remembering is really special because

fsd12 is really getting rid of the old

way of doing artificial intelligence

which was uh let's let's start with uh

you know Vision based systems that are

labeled by humans and then let's try to

get the computer to take the efforts

that humans have done saying this is a

stop sign this is is a red light this is

what this sign means you know this is

the stop line on the road whatever

instead of going you know instead of

taking this sort of a auto labeling

approach they call it again humans sort

of gave a little heads up and then the

car is like I think this is a stop sign

right and then we can sort of confirm it

uh going into this basically retrained

version which we've talked about

previously as well it's completely

retrained bottom-up trained version of

artificial intelligence for FSD using

instead of this Auto labeling technique

a technique that says just go out there

and learn how to drive which initially

sounds really scary it's like wait a

minute that sounds terrible that sounds

like it's going to take a long time but

Morgan Stanley actually makes the

argument that it's going to happen

surprisingly quickly because of not only

a the number of vehicles on the road

that Tesla can learn from whether or not

they're using FSC Tesla can learn from

all this what Morgan Stanley calls light

years of data they are collecting Tesla

can collect all of this and then learn

from that

and teach fsd12 so in other words the

drivers themselves are not Auto labeling

they are robots literally teaching the

robot in other words every Tesla driver

is the robot doing the teaching work and

a lot of people were freaking out when

it was either earlier this year or last

year Tesla was actually laying off

people in their labeling Division and

now people are starting to go oh my gosh

artificial intelligence has replaced

artificial intelligence labeling jobs

yeah that's how far along Tesla's

artificial intelligence is and this this

whole FSD thing uh is is so undervalued

uh by the market it's really incredible

uh but that's probably also in part

because a lot of institutional investors

and fund managers I hate to say it but

there is an age element here okay you

get older people we're like I ain't

trust in the damn car I've been driving

I've been driving 50 game years usually

I'm gonna trust the computer to do it

hell no I can't even get a computer to

turn on without having to restart it you

know like like you're gonna have an some

element of that right uh and so there's

gonna be a come to Jesus moment here at

some point uh but anyway let's keep

going through uh through this particular

piece uh since uh since we're gonna be

going through some numbers here I do

want to just bring your attention to uh

this date right here uh today's

obviously 9 11. uh it's a day that'll

really live in my memory forever I

remember being in a child and getting

ripped out of school because of that uh

uh that day I wasn't fourth grade great

at that time but one thing that I want

to remind you of is that on 9 15 we're

having one of the biggest expirations

ever of a coupon code for the programs

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anyway take a look at that linked down

below okay so what do we have over here

so the forces that have driven uh 70 of

Amazon's ebit can work to Tesla as well

okay great what's so powerful well

really it's the D1 chip in the dojo

ecosystem that'll actually potentially

be six times as powerful as the Nvidia

gpus now Morgan Stanley makes it clear

here that they're more evaluating Tesla

6X efficiency claim based on on what

Tesla's saying that Morgan Stanley did

not independently verify that 6X claim

so they're basically saying hey look if

it is true that Dojo is six times as

good quite frankly even if it's just

like three times as good Tesla's ability

to highly vertically integrate here by

capturing the data with the robots

basically driving the cars us humans

being those robots combining the chip

Talent with vertical integration the

software that they have unlimited access

to Capital and how this is all

vertically integrated in one company is

absolutely an obscene opportunity for

Tesla to generate massive amounts of

Revenue and this is what they call the

flywheel effect where on one side the

lower they can get the cost for

manufacturing cars the more they can get

cars on the road which creates not only

more cameras that are picking up data

but remember you got to remember the

most important part Tesla should be

paying its drivers basically because of

the value they're giving Tesla or just

by Tesla stock but anyway the drivers

the more people the more this is why

elon's like we could sell the cars for

no margin he needs butts and seats

training the damn car even when you have

FSD on yeah Tesla drivers will know this

even when you have full self-driving on

and you're driving you know how

sometimes Tesla is kind of like slow off

the start of the stop sign off the light

or it's like all right come on turn

right already like you stopped turn

right let's go

what you can do is while it's on full

shelf driving or or not and it's going

to learn both ways you could tap the gas

a little bit and kind of like okay go so

you can accelerate without disengaging

the system right and what's remarkable

about this is all of this is just

absolutely massive training so again we

are the robots training the robot it's

really bizarre it's kind of like we're

training our for our own demise

uh anyway oh that I don't know maybe I

don't know why I'm laughing at that but

anyway uh they argue here that with Dojo

that went online this summer June July

that uh Dojo all of a sudden makes Tesla

a multi-industry potential AI player and

that they can get AI training down from

months to weeks it's efficient it can

generate Revenue now uh you know what I

think is absolutely fascinating as well

is their talk about right here where

which Industries they could actually be

useful in that it's not just going to be

cars but that Tesla is AI their Vision

Ai and this is again going back to my

tweet what why I said there's a reason

uh you know my you know we're like 25

plus deep in Tesla there was a reason

for that it is the best artificial

intelligence play that exists there is

no better AI play this Vision AI is a

game changer uh and it's not just a game

changer for cars but it's a game changer

for manufacturing for robotics for

Aviation for health care trains

utilities security cameras security

facial recognition you name it this is

absolutely some incredible training also

I mean think about facial recognition

for a moment the training that's being

done inside of the vehicle to understand

what you're doing just by looking at

your face as a way of determining are

you on your phone are you paying

attention to the road are you paying

attention to the radio for too long are

you dozing off these are some incredible

tools that could end up expanding into

much more or greater opportunities

especially in the realm of security it's

also kind of weird from like a whole

privacy POV but uh we'll save that

discussion for a different day so uh

then uh what I think is so neat here is

that the the problem for artificial

intelligence really becoming like you

know driving full autonomy are the edge

case scenarios you know this is where

again you know the problem that I

regularly have with my FSD and I'm gonna

draw it out here because some people

just don't understand it uh you know the

problem that I have with my Edge case

scenario is I've got you know a road

that kind of looks like this and then

here we're gonna have a yield style of a

road this is going to be our yield over

here and uh then of course you could go

straight over here this way okay great

the problem is there's actually a a

neighborhood entrance uh right here and

then what you end up getting is a right

turn lane here that ends like this then

you have a bike lane that's sort of

right here and then you have you know

your your actual right turn over here

and so generally what you do imagine

this bike lane is sort of like a dotted

line here as it's supposed to be so you

can get over uh what what Tesla loves to

do is it loves to go from the road over

here and then go into this Lane and

basically break this line over here

which is what you're not supposed to do

this this line I shouldn't even draw it

with dots it's supposed to be solid so

so the theory is that when you want to

turn right into this neighborhood you

turn your car right into the

neighborhood first uh and uh and then

you're gone you're out of the flow of

traffic the reason you're out of the

flow of traffic is so that the vehicles

that are turning from the main road here

are going this way can actually go in if

you want to look this intersection up

exactly it's um Johnson and North Bank

Drive in Ventura but the point is uh

that the car does this and then it's

like oh no I shouldn't be here and then

it kind of tries to Zig out and it's

just a disaster every time so I pretty

much always disengage over here but even

me disengaging and then driving it the

way it should be driven uh is is a way

of training it but this is an example of

what in artificial intelligence is

called an edge case scenario and Morgan

Stanley argues that Dojo is really going

to be able to destroy these Edge case

scenarios and finally iron these suckers

out and everybody who drives FSD around

their Town knows there's some areas

where there are Edge casing areas they

just think that fsd12 is going to be

able to kill these Edge case scenarios

quickly thanks to the uh the dojo

exopods which big deal for them right

here uh they they make some comparisons

between Nvidia and how Nvidia server

Stacks compare to Dojo how important

they are today but really how it's going

to cost you about six times the amount

of money probably to set up these these

uh these uh Nvidia server racks rather

than just using Dojo because Dojo is the

application specific chip designed not

for broad-based vision-based AI but for

what Tesla needs and what's really

incredible here too is listen to this

line right here for comparison if Nvidia

is expecting to ship 200 000 to 250 000

h100s

Tesla is expecting to ship 40 to 50

000 Dojo chips now it takes more than

one Dojo chip to end up being the

equivalent of an eight h100 anyway these

h100s are pretty beastly uh but still

what's remarkable is when you line it up

like this you're like oh my gosh wow

Tesla is actually manufacturing chips at

this level that to some extent you know

with respect to your uh what a quarter

uh it's almost matching a quarter of

nvidia's h100 production uh and it just

it's designed not to show you that the

revenue is somewhat 25 equivalent but

that Tesla's really producing a massive

amount of these chips and it's not just

making the chips it's using the chips in

artificial intelligence I can apply uh

to various different Industries around

the world that is expected to to

dominate uh artificial intelligence uh

and vision Based training which is very

exciting but uh anyway so uh yeah you

can see here one uh 25 D ones is

expected to be 30 times faster than 24

gpus not directly comparing to the h100s

but making some I think a little bit

weaker comparisons over here just

because we're not talking specifically

about which chip but anyway

Morgan Stanley is very bullish in

addition to this sort of one of the big

last points they make is they actually

this is something we've been talking

about for years by the way well I mean

ever since Elon started talking about

acquiring Twitter so I guess that's been

about a year and a half

Morgan Stanley is finally saying it oh

my gosh the vast amount of data that's

starlink and Twitter have access to in

terms of language learning in terms of

uh you know basically I mean everybody's

bandwidth going through Starling uh

learning about humans all of this data

is so useful and eventually likely to be

very profitable for Tesla that we

haven't even seen the beginning yet of

Tesla autonomy or Tesla uh artificial

intelligence revenues yeah and again

this is why it goes back to my belief

that this is the best and likely most

profitable AI company to exist with the

best likelihood of surviving uh again

not just because of the vertical

integration but that flywheel effect

which takes us from again the more

robots and seats driving these cars

teaching the robots that's us the more

data we get the better we can make the

platform the more users want to use it

the better the product is the more uh

different uh vertical Stacks you can get

into and then all of a sudden Tesla

actually does become this software

company with sas-like margins really

really incredible piece and again it all

goes back to this idea right here that I

believe that Tesla is the only highly

profitable vision-based solution to

exist and there you go Morgan Stanley

has memorialized it two days after my

tweet I think they did a really good job

and I I agree with him I actually think

honestly uh their price Target would

have probably been higher

uh if it weren't for the potential and I

know this sounds crazy but if it weren't

for the potential institutional backlash

uh at Morgan Stanley like for example if

Morgan Stanley came out and said we have

all you know four thousand dollar uh uh

price target for uh oh yeah my mic isn't

playing this sorry there we go thank

thank you for catching that with the

microphone uh hopefully that wasn't too

bad anyway uh you know if Morgan Stanley

came out and they're like oh we have a

you know four thousand dollar price

target for Tesla

people would just laugh this off it

actually wouldn't have the real effect

that Morgan Stanley's piece is having

now Morgan Stanley suggesting oh 60

upside in Tesla share price this is just

the beginning once these things actually

start happening at Tesla the price

Target will actually end up getting

revised even more and more and more

again think about it and and you know I

don't want to use Kathy in in a negative

light here because you know I like and

respect Kathy but if if they pulled a

Kathy and said it's going to 1500 and

it's going to five thousand it's going

to ten thousand

even though they're probably right

it's gonna sound like a YOLO so Morgan

Stanley's kind of cooking the the

lobster or the frog in the pot slowly

and Morgan Stanley just went like

oh

I see where we're going with this let's

turn up the heat a little bit now

and then later we'll turn it up a little

more you know we'll go from 400 to 600.

to 690 to 800 to a thousand right and

slowly turn it up they'll actually have

more respect than the we're going to the

1000.

again even though that's probably just

being more transparent and upfront

Morgan Stanley is setting it up to

actually be palpable by the well I trust

the dumb computer

laughs

so anyway uh that's my take on uh the

wildness of this Morgan Stanley piece

and Tesla uh so thanks for watching that

tank on Tesla make sure to remember mark

your calendar for September 15th if you

want to get into house hack we are

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And if we max out because there's an SEC

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