In a somewhat surprising development, both President-Elect Donald Trump and Tesla Motors (NASDAQ: TSLA) made significant comebacks in 2024, revealing an unexpected connection between the two – one reclaiming office, while the other experienced a resurgence in its stock price.
As Trump’s chances of victory increased following Elon Musk’s endorsement of the Republican candidate – and potentially after Musk’s controversial proposal of $1 million daily for Pennsylvania voters – TSLA’s stock price also soared with Trump’s re-election.
Analysts at Bank of America (NYSE: BAC), who updated their forecasts on November 7, have concluded that Trump will likely continue to positively influence Tesla’s stock performance.
Bank of America presents optimistic revision of Tesla stock price target
They reiterated their ‘buy’ recommendation for the electric vehicle (EV) manufacturer, raising the TSLA stock price target from $265 to a new Street high of $350 – marking a shift from a projected downside of 9.46% at the time to an upside potential of 19.58% from the current price of $292.69.
Bank of America suggests that the Trump administration might reduce the regulatory challenges faced by Tesla, particularly concerning the ‘full-self-driving’ (FSD) technology, with Musk likely playing a key role in promoting his regulatory vision for self-driving vehicles.
In the lead-up to the election, Finbold estimated that, while Tesla might encounter challenges due to the Republican stance on a green transition, the EV manufacturer would greatly benefit from Musk’s governmental role, the added visibility, and the expected deregulation.
A recent adjustment in Tesla’s stock outlook highlights the surprising nature of this turnaround.
Prior to the election, Wedbush’s Dan Ives suggested that a victory for Harris would favor big tech, predicting that companies like Tesla, Apple (NASDAQ: AAPL), and Nvidia (NASDAQ: NVDA) might struggle if Trump returned to power.
Post-election, Ives reassessed his viewpoint, stating that Tesla is likely positioned for a valuation of $1 trillion mainly due to advancements in artificial intelligence (AI) and FSD, under the next Republican administration.
Tesla stock price rally
Whatever uncertainties existed before the election, the recent stock revisions seem reasonable when looking at the performance of TSLA following Trump’s victory.
Indeed, the majority of Tesla shares’ impressive 16.69% rally over five days, culminating in today’s TSLA price of $292.69, occurred on Wednesday, November 6, immediately after the election results were announced.
This increase has allowed the EV manufacturer not only to recover its position in the year-to-date (YTD) performance but to also be 17.71% higher than its price at the beginning of 2024.
Image Source: FilipArtLab / Shutterstock
