Trading Tesla on AI Supercomputer 'Dojo' Development

Tesla is a notoriously volatile stock as investors debate whether it is a tech company or an auto company. However, analysts are now looking at Musk's billion-dollar investment in its new AI supercomputer Dojo and what that could do for Tesla.   

Learn more about this and what analysts are forecasting for the stock.

• The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.

All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose, as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing. 

Tesla's New AI Supercomputer Dojo

Analysts and investors alike are digesting Morgan Stanley's analyst, Adam Jonas, recent upgrade of Tesla's stock price from equal weight to overweight and from a $250 to $400 price target. This is one of the largest upgrades in recent times and - if correct - would value Tesla at $1.39 trillion. 

The reasoning has to do with Tesla's new AI supercomputer called Dojo. Jonas believes that the aggressive technology that allowed Amazon to thrive can do the same for Tesla in the autonomous driving industry and boost Tesla's worth by $600 billion. 

Tesla is planning to spend more than $1 billion on Dojo through the rest of the year which aims to process visual data to provide computer vision training for its cars. However, Jonas believes that the application of a vision-based AI model could also be used in healthcare, security and other sectors.  

However, an important note to consider is that much of Jonas' rationale for Tesla's growth is down to Tesla having the ability to license out this technology, rather than actual growth in those purchasing a Tesla model. These types of very high valuations are reminiscent of technology stocks rather than auto stocks.   

Earlier this year, Tesla cut the price of some of its electric vehicles to boost demand. In fact, the planned factory shutdowns over the summer and with both production and deliveries forecasted to be lower, analysts at Deutsche Bank noted some of the risks surrounding Tesla right now.  

As some investors view Tesla as a technology stock, the company's valuations can sometimes be very outlandish, and these stocks tend to trade with a much higher degree of volatility than blue-chip stocks, so caution is required.  

The mixed opinions surrounding Tesla are reflected in the equal number of analysts with buy and hold ratings on the stock, with a few sell ratings on the stock, and the significant difference between the highest and lowest price rating of the stock, as shown below.

Tesla Stock Forecast - What do the Analysts Say?

According to analysts polled by TipRanks for a Tesla stock forecast in the past 3 months, there are currently 12 buy, 12 hold and 5 sell ratings on the stock. The highest price level for a Tesla stock forecast is $400.00 with the lowest price target at $120.00. 

The average price target for a Tesla stock forecast is $272.50.

An Example Trading Idea for the Tesla Stock Price

An example trading idea for the Tesla share price could be as follows:  

• Buy the stock on a break above $275.00 to allow for volatility. 
• Target just below the highest analyst price target of $400.00. 
• Keep your risk small at a maximum of 5% of your total account.   
• Time Line = 1 – 6 months  
• If you buy 10 Tesla shares:  
  • If target is reached = $1,250.00 potential profit [($400.00 - $275.00) * 10 shares].

Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering how mixed analysts' views are on the stock.

Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.

With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in Tesla stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.

There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall! 

How to Buy Tesla Stock in 4 Steps  

With Admirals, you can buy shares in US stocks with a competitive commission from $0.02 per share and a low minimum commission of just $1.

1. Open an account with Admirals to access the dashboard.   
2. Click on Trade on one of your live or demo accounts to open the web platform.   
3. Search for your stock in the search window at the top right to view the live price chart. 
4. Click Create New Order from the bottom of the screen to open the trading ticket. 

Click on the banner below to trade Tesla stock today! ▼▼▼ 

Do You See the Tesla Stock Price Moving Differently?   

Remember that all analytics and trading ideas are based on the personal view and experience of the author.

If you believe there is a higher chance Tesla share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.

The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.

This means you can trade long and short to potentially profit from rising and falling stock prices.

INFORMATION ABOUT ANALYTICAL MATERIALS:   

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admirals’ investment firms operating under the Admirals trademark (hereinafter “Admirals”) Before making any investment decisions please pay close attention to the following:   

• This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.    
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• With a view to protecting the interests of our clients and the objectivity of the Analysis, Admirals has established relevant internal procedures for the prevention and management of conflicts of interest. 
• The Analysis is prepared by an independent analyst, Jitanchandra Solanki (analyst), (hereinafter “Author”) based on their personal estimations.    

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