Dissecting the Musk-Trump Dynamic: Potential Impacts on Tesla and SpaceX

On Sunday, ARK Invest’s Cathie Wood discussed the potential fallout from a strained relationship between President-elect Donald Trump and Elon Musk, focusing on how it could affect Musk’s companies, Tesla Inc. TSLA and SpaceX.

Insights from Cathie Wood: During her recent appearance on CNN’s Inside Politics Sunday, Wood addressed the implications of a possible rift between Musk and Trump. Noticing the strong personalities involved, she acknowledged the risks such dynamics could entail.

Nonetheless, Wood emphasized the common vision both men share for advancing technology, especially in transportation and healthcare sectors.

Wood stated, “If you look at Elon Musk’s companies, they are leading us into a new era. Tesla is innovating with autonomous vehicles and robotaxis, while SpaceX aims to take us back to the moon and on to Mars. These goals align with President Trump’s interests.”

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Wood further commented on the dominant personalities of both Musk and Trump, indicating that such traits have significantly contributed to their respective successes. She believes they understand the implications and challenges that come with their strong personalities.

“They are focused on the prize, which is using technology to not only change transportation but particularly improve healthcare,” Wood concluded in her remarks.

Why This Matters: Wood’s thoughts align with her recent analysis regarding how a second Trump administration could influence multiple sectors. In a webinar, she expressed hope for the market under Trump’s leadership, anticipating a robust IPO market that would foster portfolio diversification and liquidity opportunities.

Additionally, Wood suggested that Trump’s administration might provide clarity in the fintech space, especially concerning digital assets. She indicated that if current SEC Chairman Gary Gensler stepped down, there might be more focus on the digital asset revolution spearheaded by Bitcoin BTC/USD.

Beyond this, Wood has openly supported Musk’s potential government roles. She has proposed the formation of a Department of Government Efficiency (DOGE) to promote tighter spending controls and constitutional reforms aimed at reducing federal expenditures.

Despite her optimistic outlook, ARK Invest has been making significant adjustments in its investments. Recently, the firm sold $18 million worth of Tesla shares across various ETFs, indicating a shift in their trading strategy amid ongoing market changes.

Stock Overview: Tesla’s stock closed 3.7% higher on Friday at $345.16, marking a 39% increase year-to-date according to Benzinga Pro data.

Averaging analyst ratings from UBS, Wedbush, and RBC Capital, the current price target stands at $313, suggesting a possible downside of 9.4%, as reported by Benzinga Pro data.