On November 19, 2024, US President-elect Donald Trump and Elon Musk watched the sixth test flight of the SpaceX Starship rocket in Brownsville, Texas.
Brandon Bell | via Reuters
Tesla Shares jumped to a record high on Wednesday, surpassing the all-time high set in 2021, driven by a post-election rally and Wall Street’s enthusiasm for Elon Musk’s electric car company.
The stock rose to an intraday high of $415, 50 cents above its previous peak, and is expected to close ahead of its high close of $409.97 on November 4, 2021.
Tesla’s market value has risen about 66% this year, with nearly all of the gains coming since Donald Trump won the election early last month. The stock rose 38% in November, its best monthly performance since January 2023 and its 10th best performance on record.
Musk poured $277 million into pro-Trump campaigns and turned his support for the Republican nominee into another full-time job ahead of the election, funding voter registration operations in swing states, according to Federal Election Commission filings. and uses his social media platform X to continually promote his preferred candidates, often with misinformation.
The world’s richest man, whose net worth has grown to more than $360 billion, will lead the Trump administration’s Department of Government Effectiveness alongside former Republican presidential candidate Vivek Ramaswamy.
His new role could give Musk control over federal agency budgets, staffing and the ability to push for the elimination of inconvenient regulations. Musk said on Tesla’s earnings call in October that he intended to use his influence with Trump to establish a “federal approval process for self-driving cars.” Currently, approvals occur at the state level.
“The stock is reacting to the Trump rally,” Roth MKM analyst Craig Irwin said on CNBC’s “Squawk on the Street” last week. Irwin just raised his price target from $85 to $380. “Musk’s sincere support for Trump could double Tesla’s enthusiast base and increase the credibility of a demand inflection point,” a report reads.
Goldman Sachs analysts raised their price targets on Tesla on Wednesday, joining a string of companies that have raised their price expectations or ratings for the stock. “The market is taking a more forward-looking approach to Tesla, including its artificial intelligence opportunities,” Goldman Sachs analysts wrote.
Analysts at Morgan Stanley and Bank of America have also issued bullish reports recently.
Since Trump’s victory, Musk has accompanied the president-elect in meetings with world leaders and begun advising him and members of Congress on which federal agencies, regulations and budget programs the billionaire wants to eliminate or slash.
Tesla surged to record levels, marking a dramatic turnaround in its performance at the start of the year. The company’s stock price plunged 29% in the first three months of 2024, the stock’s worst quarter since late 2022 and Tesla’s third-worst quarter since it went public in 2010. Business is worried, with the company reporting a drop in first-quarter revenue partly due to increased competition from China.
In its third-quarter financial report released in October, Tesla’s revenue increased by 8% year-on-year, slightly lower than expected. However, the company reported better-than-expected profits, and Musk said on the earnings call that his “best guess” was due to “lower vehicle costs” and “the coming of autonomy.” The forecast beat analysts’ forecasts.
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