In a remarkable surge following the U.S. presidential election results, shares of Tesla Inc. (TSLA) and the Direxion Daily TSLA Bull 2X Shares ETF (TSLL) skyrocketed on expectations of a favourable policy environment under the new administration led by President-elect Donald Trump.
The electric vehicle (EV) maker's stock spiked as much as 28% since Election Day, propelling its market capitalization past the $1 trillion mark for the first time since April 2022. The rally was fueled by investor optimism that Trump's presidency could benefit Tesla and its CEO, Elon Musk, who had been a vocal supporter of Trump, contributing over $130 million to his re-election campaign.
Musk's close association with the President-elect has raised hopes that the new administration may ease regulations, expedite approvals for autonomous driving technology – a key focus area for Tesla – and potentially eliminate EV tax credits, giving the company a competitive edge over rivals.
Riding on Tesla's coattails, the Direxion Daily TSLA Bull 2X Shares ETF (TSLL), a leveraged fund tracking Tesla's stock performance, soared by an astonishing 14.11% on November 11th. As a leveraged ETF, TSLL aims to deliver twice the daily returns of Tesla's stock, amplifying the impact of the company's stock surge.
Analysts at Wedbush Securities, led by Daniel Ives, raised their price target on Tesla to $400 from $300, citing the potential for a "game-changer" impact on the autonomous driving and AI initiatives under a Trump administration. Ives believes that the "federal regulatory spiderweb" around Tesla's full self-driving efforts could clear significantly, accelerating the company's autonomous driving timeline and providing a tailwind for its Cybercab (robotaxi) plans.
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