Earlier in September, Morgan Stanley's Adam Jonas boosted his 12-month price target for Tesla (TSLA) -) to $400 from $250, noting that Dojo, Tesla's custom supercomputer, could add more than $500 billion to the company's market value through quicker robotaxi adoption and network services enhancement.
Jonas said at the time that Dojo could open up a new "addressable market" for Tesla beyond "selling vehicles at a fixed price."
Related: Elon Musk makes a big move to compete with Jeff Bezos' Amazon
Armed with his new Tesla price target, Jonas joined a group of investors and analysts — including Cathie Wood of Ark Invest and Wedbush's Dan Ives — who ardently believe that Tesla is more than just a car company.
In a note Oct. 9, Jonas reiterated his $400 price target, pointing to the looming intersection between the automobile and mobile device industries.
Teslas have "long been described as iPhones on wheels," Jonas said. "From our studying of the software-defined vehicle it becomes clear that many of the key attributes of today's connected vehicles include all the primary hardware of a smartphone." The only difference is that the batteries, screens, computer, cameras and sensors in a Tesla come complete with a few additional features, notably a motor, seats and wheels.
The line between the automotive market and the smartphone market, Jonas said, has become blurred; it's not too soon for investors to begin exploring the implications of that for Tesla.
"Our thesis on Tesla is heavily dependent on an expansion of the addressable market beyond the point-of-sale business model," Jonas said. "Do Elon Musk's plans to turn X into an everything app require the development of hardware outside the car? The ultimate destination of the future of mobility will be anything but ordinary."
Related: Prominent investment bank just boosted its Tesla price target by $150
Jonas' note comes less than a month after Chinese electric vehicle maker Nio launched a smartphone designed to be used with its cars.
Musk hinted last year that, if Twitter ran into app-store difficulties with Apple (AAPL) -) and Google (GOOGL) -), he would consider making an alternative smartphone.
"I certainly hope it does not come to that, but, yes, if there is no other choice, I will make an alternative phone," he wrote.
Excitement over Tesla's Dojo supercomputer comes amid reports that the company is building a new facility at its Austin, Texas headquarters to house part of Dojo as it eyes continuous expansion into the cloud services sector.
Shares of Tesla rose close to 2% throughout the day Tuesday. The company's stock is up around 115% for the year.
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