Dan Ives, an analyst at Wedbush Securities, forecasts significant progress in Tesla's (TSLA, Financial) artificial intelligence initiatives despite potential hurdles in the broader electric vehicle sector. Ives believes a return of Donald Trump to the White House could greatly enhance Tesla's AI ambitions, potentially adding an "incremental $1 trillion AI valuation" for the electric carmaker in the coming years.
The outlook for the broader electric vehicle industry remains mixed. Tesla CEO Elon Musk, who has actively supported Trump in the past, indicated during Tesla's second-quarter earnings call that an incoming administration might remove electric vehicle subsidies and tax credits.
Ives stated in an interview that Trump's presidency could alter the landscape for Musk and Tesla, describing the alignment between Musk and Trump as a "significant strategic gamble" that could be highly beneficial for Tesla's AI and autonomous driving narrative. Wedbush anticipates a $40 to $50 increase in Tesla's stock price under a Trump presidency, equating to a 16% to 20% rise based on current trading levels. This optimistic outlook is attributed to Tesla's established market position and production capabilities.
In a report released Tuesday, Wedbush analysts noted that while Trump's election might generally be negative for the electric vehicle sector due to potential cuts in EV tax incentives, it could be a positive factor for Tesla with some caveats.
Apart from Tesla, Ives expects significant AI advancements to benefit other major tech companies, including Microsoft, Amazon, Alphabet's Google, and Palantir.
Tesla's stock performed notably well, closing with a 14.75% increase to $288.53, marking a 16.15% gain for the year so far.
