Morgan Stanley’s List of Promising Tech Stocks

Morgan Stanley has compiled a list of global stocks that it believes are well-positioned to benefit from the acceleration of custom chip design by US hyperscalers. This is especially relevant as custom chips are expected to outgrow AI graphics processing units in the long term. According to Morgan Stanley analysts, these stocks are in a favorable position due to their involvement in Tesla’s supercomputer system called Dojo, which has revolutionized the AI chip industry and resulted in significant efficiencies and cost savings.

Companies Supporting Tesla’s Dojo

Morgan Stanley highlights four companies that provide components and services for Tesla’s Dojo. These companies are:

• Taiwan Semiconductor Manufacturing Company (TSMC): TSMC is the wafer foundry vendor for Tesla’s Dojo 1 (D1) and Dojo 2 (D2). The analysts reiterate their overweight position on TSMC, projecting a 32% upside from its price on Sept. 12.
• Samsung: Samsung has received an overweight rating from the bank for its involvement in winning projects in high bandwidth memory (HBM) and for being the key foundry supplier for Tesla’s full self-driving (FSD) chip. The analysts estimate a 35% upside from its Sept. 12 price.
• Nvidia: Tesla expects Dojo to operate alongside NVIDIA GPUs, making Nvidia an attractive option. The bank is overweight on the stock and projects a 39% upside from its price on Sept. 12.
• MediaTek: Morgan Stanley has upgraded Taiwanese semiconductor company MediaTek to “overweight” from “neutral” due to its potential involvement in Google’s tensor processing unit (TPU) projects. This diversification away from its smartphone-centric business to AI is expected to contribute to a stock re-rating. The company has a target price of 888 Taiwanese dollars, representing a 21% upside from its price on Sept. 12.

Morgan Stanley’s insights into these companies’ roles in Tesla’s Dojo and their potential for growth make them compelling choices for investors.

Reported by HaberTusba’s Michael Bloom.