On November 14, 2024, a Tesla Cybertruck was parked outside a dealership in Austin, Texas.
Brandon Bell | Getty Images
Tesla The stock fell more than 8% on Wednesday, its biggest drop since Donald Trump won the election last month, sparking a sharp rally.
Tesla closed at $440.13, still up 75% since Election Day on November 5. , hitting a record high.
“Most investors we spoke to were shocked by the magnitude of the rally and are increasingly unsure about what to do with the stock given how disconnected it is from fundamentals,” Barclays analysts wrote in a note on Wednesday. They have a Hold rating on the stock and a price target of $270.
The pullback coincided with a sharp decline in the broader market, with the Nasdaq plunging 3.6%, marking the tech index’s second-worst day of the year.
Tesla shares rose 38% in November, its best monthly performance since January 2023 and its 10th best performance on record. Chief Executive Musk is a major supporter of Trump, spending $277 million primarily on his campaign, according to Federal Election Commission filings.
Now, Musk, the world’s richest man, will lead the Trump administration’s Department of Government Effectiveness, which is expected to function as an advisory office alongside former Republican presidential candidate Vivek Ramaswamy.
His new role could give Musk influence 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.”
While Tesla still doesn’t make robotaxis or operate driverless ride-hailing services, its main domestic rival Waymo said on Wednesday it would conduct more than 4 million paid robotaxi rides in 2024 as it expands its commercial operations in the United States. travel
“Tesla is Elon Musk’s only publicly traded company, and it often serves as a proxy for Musk’s own investments,” Barclays analysts wrote. “This increase in value is understandable, but it further exacerbates Tesla’s Tesla stock is already high in key man risk.”
Wednesday, a Quinnipiac Poll It was found that 53% of American voters disapprove of Musk “playing an important role in the Trump administration.” The divide was sharp across party lines and gender – only 31% of women surveyed said they supported Musk playing a major role in the next administration, and just 5% of Democrats supported it.
Musk has also complained in recent days that the U.S. Securities and Exchange Commission issued a “settlement request” for his sale of Tesla stock in 2022 as he sought to acquire Twitter, now known as X.
An SEC spokesperson declined to discuss the matter, telling CNBC that the agency “conducts its investigation on a confidential basis to maintain the integrity of the investigative process.”
Tesla will announce fourth-quarter and year-end vehicle deliveries in January. Since delivery of the Cybertruck began in November 2023, Tesla has been working hard to boost sales of its electric vehicles through a series of incentives, such as 0% financing.
watch: Analysts explain why Tesla’s momentum remains unstoppable
About The Author
