Tesla’s stock is soaring, fueled by its perceived alignment with the Trump administration.
On Wednesday, Tesla shares reached an all-time high for the first time since November 2021, driven by optimism surrounding President-elect Donald Trump’s plans to boost autonomous driving initiatives.
The stock rose 5.93% over the past week, closing at $424.77, supported by positive analyst reports. Since the U.S. presidential election on November 5, Tesla’s stock has surged 69%, pushing its market value beyond $556 billion.
Elon Musk, Tesla’s CEO and a prominent figure in Trump’s campaign, has been appointed to co-chair the administration’s efficiency department alongside entrepreneur Vivek Ramaswamy.
Musk’s close relationship with the president-elect, combined with plans to ease regulations for self-driving cars, has caused Tesla’s stock price to skyrocket.
Tesla was previously the underperformer among the Magnificent Seven tech companies, failing to post gains over the past three years.
However, Cantor Fitzgerald analyst Andres Sheppard has expressed renewed confidence in Tesla’s robo-taxi division. He highlighted Trump’s plans to establish a federal framework for autonomous vehicles, which could accelerate Tesla’s growth in the U.S.
Just a month ago, Tesla faced challenges due to slowing electric vehicle demand, which sparked an industry-wide price war and squeezed profits.
The company’s October third-quarter results, which exceeded expectations, reignited hope that the worst electric vehicle slump was behind them. However, the real surge began after Trump’s election victory last month.
Morgan Stanley analyst Adam Jonas noted that Musk’s political involvement has broadened investor confidence in Tesla’s outlook. This prompted Jonas to raise his price target for Tesla from $310 to $400.
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