Tesla's (TSLA) stock price has continued its remarkable surge following Donald Trump's victory in the 2024 U.S. presidential election. The electric vehicle maker's shares jumped over 7% in premarket trading on Monday, extending last week's strong rally fueled by optimism that Tesla could benefit from CEO Elon Musk's close ties to the incoming Trump administration.
Since Trump's election win on November 5, Tesla's stock has soared by around 37%, pushing the company's market capitalization above $1 trillion for the first time since April 2022. The surge has added about $67 billion to the net worth of Musk, who owns a 20.5% stake in Tesla and actively campaigned for Trump during the election cycle.
Investors are betting that a Trump presidency could accelerate regulatory approvals for Tesla's autonomous driving technology and provide a more favorable environment for the company's growth. Analysts believe that Trump could help fast-track initiatives related to artificial intelligence and self-driving cars, which are crucial for Tesla's plans to launch a robotaxi service.
Wedbush Securities analyst Dan Ives raised his price target for Tesla to $400, up from $300, citing the potential benefits of a Trump administration. Ives believes the "Trump White House win will be a gamechanger for the autonomous and AI story for Tesla and Musk over the coming years," as the regulatory hurdles they have faced in recent years could be cleared under the new administration.
However, some analysts caution that the actual benefits for Tesla from a Trump presidency remain unclear, and the company's stock might be overvalued at current levels. Nevertheless, the market seems to be pricing in significant upside for Tesla, driven by Musk's close relationship with the president-elect and the potential for a more favorable regulatory environment.
