Tesla’s market cap hit one trillion dollars, rising 8% on Trump’s re-election, with expectations of eased regulations boosting its AI and FSD.
As the market capitalization of Tesla surpassed one trillion dollars, the company’s stock shares increased by eight percent on Monday, building on the postelection bounce that occurred the previous week.
The rise in the stock price is a result of former President Donald Trump’s successful bid for a second term in office. Elon Musk, CEO of Tesla, is a prominent supporter of Trump’s campaign and a crucial financial sponsor of his presidential campaign.
Analysts Raise Tesla Stock Price Targets Following Election Results
Analysts view Musk’s tight relationship with Trump as potentially beneficial for Tesla, particularly in the fields of artificial intelligence (AI) and autonomous driving. Following the election of Donald Trump as president, analysts at Wedbush Securities, led by Dan Ives, increased their price objective for Tesla from $300 to $400, citing a “game-changer” shift in the market.
Ives brought attention to the fact that a Trump administration might reduce the regulatory hurdles that stand in the way of autonomous vehicle technology, which would speed up Tesla’s development of Full Self-Driving (FSD) and artificial intelligence capabilities.
Ives made the following statement in his writing: “We believe the march to a $1.5 trillion and $2 trillion valuation for TSLA over the next 12 to 18 months has now begun.” He also mentioned that the regulatory landscape might be significantly more favorable under Trump’s administration.
There was also an increase in the price objective that Bank of America had set for Tesla last week, which went from $265 to $350. The company observed that it may potentially reap benefits from the possibility of regulatory oversight of autonomous vehicles, which would facilitate the implementation of FSD across the United States market.
Reports indicate that Musk has contributed over 130 million dollars to Trump’s campaign and has frequently attended his rallies. There has been a rise in the amount of speculation over Musk’s potential involvement in the Trump administration as an advisor.
Trump has even suggested that Musk could be in charge of a government efficiency effort. Elon Musk’s involvement in the government could potentially enhance his access to decision-makers and shape policies that benefit his businesses, including SpaceX and Neuralink.
Certain observers are of the opinion that Musk’s alliance with Trump may be fraught with dangers, particularly in light of the fact that Trump has a long history of being skeptical of federal incentives for electric vehicles.
The rapid increase in Tesla’s stock price, on the other hand, implies that investors now perceive Musk’s influence in Washington as a net positive for the company. While this was going on, the Elon Musk business said in October that it had not sold its 11,509 Bitcoin holdings, which had significantly increased to $978,265,000 as the price of Bitcoin reached a new all-time high.
Tesla’s Market Value and Competitive Positioning
Over the course of the last five days, Tesla’s stock has increased by more than 44 percent, sending the company’s valuation back above one trillion dollars for the first time in two years.
There is a dedicated investor base that recognizes the potential for long-term growth in Tesla’s autonomous and artificial intelligence technologies, which has helped the firm achieve its current position as one of the most valuable manufacturers in the world.
The post-election bounce has pushed Tesla shares closer to the $400 barrier. Analysts are estimating that favorable federal regulations might provide extra value for the company’s artificial intelligence and autonomous driving endeavors.
Cathie Wood’s Ark Investment Management, on the other hand, has adopted a conservative strategy, selling more than 330,000 Tesla shares since October 28. In spite of this, Tesla continues to be Ark’s most significant position, accounting for very close to fifteen percent of its ARK Innovation ETF.
