[Financial News]
Elon Musk, the CEO of Tesla, cheered after delivering a speech in support of former President Donald Trump at Madison Square Garden in New York on the 27th of last month (local time). Since Election Day on the 5th, Tesla’s stock has surged by over 40%.
“A Trump victory in the White House will be a game changer for Tesla’s autonomous driving and artificial intelligence (AI) story, and for Musk over the next few years,” said Dan Ives, a Wedbush Securities analyst and one of Tesla’s leading optimists, in an analysis note on the 11th. He optimistically predicted that Trump’s presidential win would be a game changer for Tesla.
Based on this optimism, he raised Tesla’s target stock price from $300 to $400.
Tesla continued its surge that began on the 5th.
Ives expressed optimism that Musk’s strategic choice of supporting Trump, who declared early support, led to his election victory, would be a game changer for Tesla.
Trump has pledged to repeal the Inflation Reduction Act (IRA), which provides subsidies for electric vehicles, including Tesla, but it is expected to help Tesla, which has the capability to thrive without subsidies, regain its market share in the U.S. electric vehicle market.
Moreover, Tesla’s initiatives in autonomous driving and AI, as future growth engines, are anticipated to witness significant growth, bolstered by Trump’s deregulation measures.
Ives is optimistic that Tesla will leap from being a simple electric vehicle company to a leading global technology company based on AI.
Ives identified Tesla as the most undervalued AI-themed stock in the market and anticipated that things would change with Trump’s election. Tesla had been stuck under stringent federal regulations for years, but these regulations are expected to disappear.
Ives remarked that Musk had made a strategic and bold bet on Trump and that with the success of this once-in-a-lifetime gamble, Tesla and Musk now only need to reap the rewards.
He projected that if regulations are relaxed, the value of Tesla’s AI and autonomous driving business alone would be around $1 trillion, and the market capitalization of Tesla could rapidly increase.
He predicted that Tesla’s market cap, currently at about $1.1 trillion, could reach between $1.5 trillion and $2 trillion within the next 12 to 18 months.
Ives raised Tesla’s target stock price from $300 to $400.
Regarding subsidies and tariffs, Ives said that while Trump’s victory might negatively impact the overall electric vehicle sector by repealing EV subsidies, it would be favorable for Tesla, considering the U.S. might impose high tariffs on China, a global leader in price competitiveness.
He noted that Tesla, with its economy of scale, holds an unmatched market position in the electric vehicle sector and that Trump’s repeal of EV subsidies may assist in the recovery of Tesla’s market share.
Furthermore, with China-based EV companies like BYD and Nio, as well as Chinese solar products, facing significant tariffs in the U.S. market, Tesla’s solar business might experience a boom.
Meanwhile, Tesla’s stock continued to skyrocket.
Tesla’s stock soared by $28.78 (8.96%) to $350.00 compared to the previous week. After the election day on the 5th, Tesla’s stock price surged by more than 44% in just five trading days. For the year overall, the stock, which had only increased by about 1% until the 4th, soared to nearly 40%.