Market Pulse: Investors Eye Tesla’s Potential as Trump Administration Takes Shape
Recent shifts in the capital markets have seen significant volatility as Vice President Kamala Harris and former President Donald Trump competed for the presidency. With the election now concluded, many investors are contemplating the potential effects of a Trump presidency on the market, especially in technology.
Dan Ives, an analyst at Wedbush Securities, recently shared his optimistic outlook for the technology sector during an interview with Yahoo! Finance. He believes that Tesla (NASDAQ: TSLA) is set to expand rapidly under Trump’s administration.
Let’s examine why tech stocks, particularly Tesla, could be significant under the upcoming Trump administration.
Prospects for Technology Companies Under Trump
A key theme throughout Trump’s campaign was the idea of imposing tariffs on certain imported goods. Although this strategy is still conceptual, it may predominantly target overseas tech firms.
Unlike the Biden-Harris administration’s push for increased U.S. semiconductor manufacturing, Trump might focus on supporting domestically built technology and American businesses.
Image source: Getty Images.
Dan Ives Highlights Tesla’s Unique Opportunities
During the election, Tesla CEO Elon Musk became a notable figure supporting Trump’s campaign. Prior to this, Musk had hinted at forming a new government agency aimed at enhancing efficiency by significantly cutting the federal budget.
In a recent video, Ives explains why Tesla stands to benefit from the Trump presidency.
“Autonomous is going to get fast-tracked in our opinion, and that is significant,” says Wedbush managing director @DivesTech about $TSLA. “That’s worth $1 trillion alone in terms of the AI piece to Tesla. For Musk, the bet on Trump is a poker move for the ages.” pic.twitter.com/U3rMjisDSE
— Yahoo Finance (@YahooFinance) November 8, 2024
As Ives suggests, Musk might act as an influential advisor within the Trump administration. This could lead to quicker regulatory approvals for Tesla’s autonomous vehicle advancements.
Musk’s role in the White House could trigger a remarkable growth phase for Tesla. In addition to Ives, Cathie Wood of Ark Invest sees the autonomous driving sector as a potential trillion-dollar opportunity.
Should You Buy Tesla Stock Now?
On October 5, Musk was seen alongside then-candidate Trump at a Pennsylvania rally. In the month following, Tesla’s shares rose by 28% as of November 8 market close.
After Election Day on November 5, Tesla stock increased by 33%. This price change indicates that investors are starting to account for Musk’s involvement with the Trump campaign and potential gains for his companies due to the new administration.
TSLA data by YCharts
While I align with Ives’ viewpoints, I urge investors to keep a wider perspective. Tesla’s stock is currently buoyed by significant excitement among investors, leading to noticeable stock price increases in a short period.
This level of volatility might present opportunities for day trading, but I anticipate a sell-off could occur soon. Those who chase after quick swings might find themselves unprepared for a downturn.
Therefore, I recommend caution in buying Tesla stock immediately. However, I’m optimistic about its potential over the next four years under Trump. I agree that Musk’s connection with Trump may yield benefits, so it’s wise to monitor Tesla’s developments in autonomous driving, as progress in this area could greatly influence stock performance.
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Adam Spatacco holds positions in Tesla. The Motley Fool also has positions in and recommends Tesla. Please refer to the Motley Fool’s disclosure policy for more information.
The opinions expressed here reflect those of the author and do not necessarily represent the views of Nasdaq, Inc.
