Jamie Spencer
Tesla’s shares soared to a new all-time high on Wednesday, closing at $424.77, surpassing the previous record of $409.97 set on November 4, 2021. The surge was fueled by a post-election rally and heightened enthusiasm from Wall Street over Elon Musk’s electric vehicle company.
Significant Market Gains in 2024
Tesla’s market value has increased by approximately 71% this year, with most of the gains occurring since Donald Trump’s election victory last month. November saw Tesla’s stock climb 38%, marking its best monthly performance since January 2023 and the 10th-best monthly rally in the company’s history.
Musk’s Political Involvement and New Role
Elon Musk, Tesla’s CEO, contributed $277 million to a pro-Trump campaign and played an active role in supporting the Republican nominee. His efforts included funding swing-state voter registration drives and promoting Trump on his social media platform, X. Musk is set to lead the Trump administration’s newly created “Department of Government Efficiency,” potentially giving him influence over federal budgets, staffing, and regulatory frameworks.
Musk has indicated plans to leverage this position to push for a federal approval process for autonomous vehicles, currently regulated at the state level.
Analyst Upgrades and Market Optimism
Tesla’s recent performance has attracted bullish sentiment from major Wall Street firms. Goldman Sachs analysts raised their price target, citing the company’s AI potential and forward-looking market approach. Similarly, Morgan Stanley and Bank of America have issued optimistic reports.
Craig Irwin, an analyst at Roth MKM, attributed Tesla’s recent surge to the “Trump bump,” stating that Musk’s public support for Trump has likely expanded Tesla’s enthusiast base and boosted credibility for an uptick in demand.
A Dramatic Turnaround for Tesla
Tesla’s current rally marks a sharp reversal from earlier this year. The company’s stock dropped 29% in the first quarter of 2024 due to concerns over declining revenue and rising competition from Chinese EV makers. However, the third-quarter earnings report in October showed an 8% year-over-year revenue increase and better-than-expected profits.
During the earnings call, Musk forecasted vehicle growth of 20% to 30% in 2025, driven by lower-cost vehicles and advancements in autonomous technology. This exceeded analysts’ predictions and further boosted investor confidence.
