Tesla Shares Surge Post-Election Despite Recent Setbacks
Market Confidence Rides High on New Administration’s Impact
Tesla (NASDAQ:TSLA) shares fell 6% on Tuesday, yet they have been enjoying a significant upward trend since the election of Donald Trump, pushing the stock past the $1 trillion market capitalization mark. Investors appear to believe that Trump will support Elon Musk and his initiatives due to Musk’s backing during the election campaign.
Wedbush analyst Daniel Ives shares this positive outlook, stating that Trump’s victory will be a “gamechanger for the autonomous and AI story for Tesla and Musk over the coming years.”
“Musk made a strategic bet on a Trump administration win,” Ives states, “which will be recognized as a ‘bet for the ages’ among TSLA bulls as Tesla and Musk prepare to benefit from a more favorable regulatory environment.”
Looking ahead, Ives predicts that advancements in autonomous driving and full self-driving (FSD) technology will speed up in the upcoming year, serving as a “major tailwind” for the anticipated launch of the Cybercab. He estimates that the potential value of AI and autonomous driving alone could reach $1 trillion for Tesla.
Interestingly, Trump has shown little enthusiasm for electric vehicles (EVs), with his administration possibly harming the sector. An expected reduction in EV rebates and tax incentives could negatively affect the industry. However, this might work in Tesla’s favor. The company’s extensive reach in the EV market could give it a “clear competitive edge,” especially if EV subsidies are reduced starting next year.
Additionally, anticipated increases in tariffs on Chinese imports could further restrict access for budget-friendly Chinese EV competitors like BYD and Nio in the U.S., which could help Tesla maintain its market share.
However, some risks remain. Higher tariffs on Chinese imports might provoke “retaliatory policies,” potentially leading to a trade conflict that could pose “geopolitical headwinds” for Tesla in the crucial Chinese market.
Ives further elaborates, “China is a key market for Tesla. We predict some exceptions for both Tesla and Apple concerning the China tariffs. We also expect Musk to play a significant role, although not in a formal Cabinet position, in tariff discussions early in 2025.”
Considering these factors, Ives has raised his Tesla price target from $300 to a Wall Street-high of $400, suggesting a potential 14% upside in the coming months. His stock rating remains Outperform. (To review Ives’ track record, click here)
Currently, 10 analysts align with Ives in the bullish camp for TSLA, while 16 maintain a Hold rating and 8 recommend Sell. Overall, this culminates in a Hold (i.e., Neutral) consensus rating. Many analysts view the stock as overvalued; with shares priced at $207.83, the average target suggests a potential drop of about 37% over the next year. (See Tesla stock forecast)
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Disclaimer: The views and opinions expressed in this article are solely those of the featured analysts. The content is intended for informational purposes only. It is essential to conduct your own analysis before making any investment decisions.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
