Tesla (TSLA, Financial) saw a significant rise in its stock price, climbing by 10% and pushing its market value to $1.13 trillion. This surge follows the recent optimism surrounding Trump's election victory. Wedbush analysts reiterated their "outperform" rating on Tesla and raised their price target from $300 to $400, expressing confidence that Trump's presidency will impact Tesla and Musk’s narratives on autonomous driving and AI in the coming years.
Analysts predict that autonomous driving and AI could add $1 trillion in value to Tesla (TSLA, Financial), anticipating regulatory policy changes could lead to rapid expansion of Musk's business ventures. Following Trump's decisive election win, Musk's net worth surpassed $300 billion, reinforcing his status as the world's richest person, largely aided by Tesla's stock ascent.
There remains uncertainty about whether Musk will hold an official position in Trump's administration or influence policy decisions within Trump's core circle. Nonetheless, Musk's fortunes seem to thrive, with expectations of potential new government contracts worth billions, aside from SpaceX's existing $19 billion contracts. Also, ongoing federal lawsuits and investigations against his companies may face resolution.
Bank of America's recent report suggests it's challenging to determine the benefits Tesla may gain from Musk's growing public relationship with Trump, but it’s a scenario to monitor. They adjusted Tesla's price target from $265 to $350.
Previously, Trump expressed intentions to cut the $7,500 federal tax credit for electric vehicles, which historically boosted Tesla's sales. At a recent rally, Trump hinted at appointing Musk to improve "government efficiency," with Musk present during a call between Trump and Ukrainian President Zelensky.
Despite such developments, Per Lekander, CEO of hedge fund Clean Energy Transition, believes Trump's win is negative for Tesla due to potential cuts in electric vehicle subsidies. Yet, he concedes that Tesla's stock might benefit in the short term following Trump’s election. Edward Lees, an investment manager at BNP Paribas, noted Musk's influence as bridging the tech world and Washington.
