 "Elon Musk's Tesla stocks on unstoppable rally after Trump's win, here's why")
An unstoppable rally is seen in Tesla stocks as investors continue to bet big after Donald Trump wins the 2024 US Presidential election as they feel it would bring windfalls to the Elon Musk-owned EV maker as the two share a close relationship.
The Trump-Musk bond became the best after the Tesla CEO contributed at least $119 million to a pro-Trump spending group, according to federal records. Now, it appears that Musk’s funding is getting him richer.
Tesla shares, on Monday, jumped over 9 per cent, extending a winning streak to five sessions.
In the trading days since the 2024 US Presidential election, Tesla stocks all together surged past 40 per cent, adding more than $300 billion in market capitalisation since the result of the November 5 US election.
After Trump’s triumph, Tesla stocks surpassed $1 trillion in market value for the first time in two years.
However, if gains continue, Tesla stocks will rise to $348.30, pushing the value of the automaker up to nearly $87 billion.
Options traders are betting on further gains. The premium of three-month calls over puts is at the highest since early 2021, with sizable volume in contracts looking for a rally to $450 and above.
Musk’s net worth rises
According to Forbes, Musk’s net worth has swelled to $320 billion, putting him close to $90 billion ahead of Oracle founder Larry Ellison, the world’s second-richest person.
For the past few months, Musk has kept himself massively engaged in getting Trump back into the White House. He even funded a swing-state operation to register right-leaning voters.
Impact Shorts
More ShortsMusk started $1 million giveaways to registered voters who signed one of his America PAC petitions, and faced a lawsuit over running an illegal lottery in Pennsylvania.
He also used his social media platform X, which he acquired in 2022, to constantly express his support for Trump.
A report by Bloomberg quoted Wedbush analyst Daniel Ives as saying that a Trump White House will be a “game-changer” for Tesla’s self-driving and artificial intelligence efforts.
Ives has raised his price target on Tesla to $400 from $300 earlier. He estimates that the “AI and autonomous opportunity is worth $1 trillion alone for Tesla.” The analyst maintained his buy-equivalent rating on Tesla stock.
On Monday, Tesla’s 14-day relative strength index, a gauge of bullish and bearish price momentum, closed at 81. A level above 70 is often considered a technical signal that a drop may soon be in store.
Tesla’s EVs, SpaceX rockets and Neuralink brain chips – all the business ventures of Musk depend heavily on government regulation, subsidies or policy.
Musk’s potential influence in the government could be significant for his other ventures too.
In September, Trump said he would establish a government efficiency commission headed by Musk to cut federal spending.
With inputs from agencies.
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