"Relying on the mother's wealth" has led to an astonishing stock price? Tesla's market value has surged by over $300 billion since Trump's return to the presidency
After Donald Trump won the presidential election, Tesla's stock price has risen by more than 39%, with a market value increase of over $300 billion, closing up about 9% on Monday to $350. Market analysts pointed out that Tesla is a typical "momentum" stock, with investor sentiment changing rapidly. Options traders are betting that the stock price will rise further, and Wedbush analysts have raised the target price to $400, believing that opportunities in artificial intelligence and autonomous driving could make Tesla worth $1 trillion
According to the Zhitong Finance APP, after Donald Trump won the presidential election, fans of Tesla (TSLA.US) began to regroup. As investors flocked to the company's stock, believing that Trump's second term would bring unexpected wealth to the electric vehicle manufacturer led by Elon Musk, the rise in Tesla's stock price seemed unstoppable. Since the election on November 5, the stock has risen over 39%, with a market capitalization increase of over $300 billion. The stock closed up about 9% on Monday, reaching $350.
Market professionals pointed out that Tesla is a typical "momentum" stock, where its gains and losses can snowball rapidly when investor sentiment shifts sharply in either direction.
Steve Sosnick, chief strategist at Interactive Brokers, stated, "Musk has bet everything on Trump's victory, so it's understandable why the market sees Tesla as a beneficiary. Coupled with the market's tendency to buy on dips, chase rebounds, and often use leverage or options to achieve this, we are witnessing a rise that approaches the absurd."
Options traders are betting that the dollar will rise further. The premium of three-month call options relative to put options is at its highest level since early 2021, with a large number of contracts expecting the stock to rise to $450 or more.
This would push Tesla's stock price above the intraday all-time high of $414.50, which was set during the pandemic when retail traders drove up the prices of many popular stocks. Some sell-side analysts welcomed this rekindled enthusiasm.
Wedbush analyst Daniel Ives stated that Trump's entry into the White House would "change" Tesla's efforts in autonomous driving and artificial intelligence, raising Tesla's target stock price from $300 to $400. He estimated that "the opportunities in artificial intelligence and autonomous driving alone are worth $1 trillion for Tesla" and maintained a buy rating on the stock.
In Sosnick's view at Interactive Brokers, a favorable regulatory environment, whether in general or tailored specifically for Musk's enterprises, could theoretically pave the way for Tesla's expansion in autonomous driving technology.
Wall Street's target prices have not kept pace with the stock's movement, currently suggesting a decline of about 32% for the stock over the next 12 months. Some analysts expressed skepticism about the magnitude of this rebound, stating that it may overestimate any gains Tesla could derive from a Republican electoral victory.
On Monday, Tesla's 14-day relative strength index (a measure of bullish and bearish price momentum) closed at 81. A level above 70 is typically considered a technical signal indicating a potential downturn may occur soon.
Seth Goldstein, an analyst at Morningstar, stated last week, "While the election may bring benefits, Tesla's stock appears to be overvalued."