Shares of Tesla Inc continue to rise, gaining by close to 10% on November 11 to nudge past the $350 mark on anticipation of potential business benefits under a Trump 2.0 administration.
Wedbush’s managing director Dan Ives has raised price target on Tesla to $400 per share, betting that Donald Trump’s Presidential election win “will be a gamechanger” for autonomous driving and Tesla. Ives has hinted that fewer regulation could mean Tesla could gain a competitive edge against Chinese EV markers in the US market.
Barclays analyst Dan Levy said the rally in Tesla shares reflect on Elon Musk’s "prominent role within the Trump campaign, and likely a reminder of Tesla as the ‘original meme stock,’ with Tesla trading up alongside crypto."
Policy Tailwinds?
Elon Musk had pledged financial support in excess of $130 million and amplified Trump's agenda on social media platform X that he owns, leading to the anticipation of benign regulation for autonomous driving under Trump administration. Musk's significance in Trump's election win was not lost on anyone after the President-Elect praised him during his victory speech, calling him a genius.
It is anticipated that Musk may wield some influence in defining regulations for autonomous vehicles under Trump 2.0, helping Tesla's progress in this area. Not just Tesla, Musk's other ventures such as SpaceX, Neuralink, Starlink and the AI plans are dependent on policy oversight.
Tesla's Rise After Trump Win
The shares of Tesla has jumped nearly 28% since Trump's election victory on Wednesday, rallying once again past $1 trillion in market capitalisation, first time in two years. While Trump may have opposed EV incentives during the campaign trail, the market sentiment on Wall Street suggests Trump 2.0 may favour the automotive and EV industry, especially as it is creating manufacturing jobs.
Efficiency Benefit?
Musk's potential role in the Trump administration to drive efficiency could mean some of the future government contracts may come Tesla or SpaceX's way.
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