Tesla Stock Price Jumps 8% As Trump Trade Continues

Tesla stock shares surged 8% on Monday, building on last week’s postelection rally as the company’s market valuation crossed $1 trillion.

The stock’s climb comes after former President Donald Trump secured a second term, with Tesla CEO Elon Musk as a prominent supporter and key financial backer of Trump’s campaign. Analysts see Musk’s close relationship with Trump as potentially advantageous for Tesla, particularly in the areas of artificial intelligence (AI) and autonomous driving.

Analysts Raise Tesla Stock Price Targets Following Election Results

Wedbush Securities analysts led by Dan Ives raised Tesla’s price target from $300 to $400, citing a “game-changer” shift with Trump in office. Ives highlighted that a Trump administration could ease regulatory barriers for autonomous vehicle technology, accelerating Tesla’s development of Full Self-Driving (FSD) and AI capabilities.

“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,” Ives wrote, adding that the regulatory landscape could be far more favorable under Trump.

Bank of America also raised its price target on Tesla last week, moving it from $265 to $350. The firm noted that Tesla may benefit from potential federal oversight of autonomous vehicles, which could streamline FSD deployment across the U.S. market.

Elon Musk Growing Influence in Washington

Musk reportedly contributed over $130 million to Trump’s campaign and has appeared at multiple Trump rallies. Speculation has increased about Musk taking on an advisory role in the Trump administration, with Trump suggesting Musk could lead a government efficiency initiative.

Elon Musk’s involvement in the administration could give him closer access to decision-makers and potentially shape policies that favor Tesla and other ventures under Musk’s leadership, including SpaceX and Neuralink.

Some analysts caution that Musk’s alignment with Trump may come with risks, especially given Trump’s history of skepticism toward federal incentives for electric vehicles. However, Tesla’s rapid stock rise suggests that investors currently view Musk’s influence in Washington as a net positive for the company. Concurrently, the Elon Musk company declared on October that it did not sell its 11,509 BTC holdings which have surged to $978,265,000 as Bitcoin price hits a new ATH.

Tesla’s Market Value and Competitive Positioning

Tesla’s stock is up more than 44% over the past five days, bringing its valuation back above $1 trillion for the first time in two years. The company now ranks as one of the most valuable automakers worldwide, supported by a loyal investor base that sees long-term growth potential in Tesla’s autonomous and AI technologies.

The post-election rally has pushed Tesla shares near the $400 mark, with analysts projecting that favorable federal policies could unlock additional value in the company’s AI and FSD initiatives.

Cathie Wood’s Ark Investment Management, however, has taken a cautious approach, selling over 330,000 Tesla shares since October 28. Despite this, Tesla remains Ark’s largest holding, accounting for nearly 15% of its ARK Innovation ETF.