Shares of Tesla, Inc (NASDAQ:TSLA) continue to rise, thanks largely to the Musk-Trump alliance, which is gaining strength and boosting earnings. Tesla shares opened a new chapter in last week’s rally with a Monday jump of over 8.96%, which was fueled by the automaker’s bets benefiting from CEO Elon Musk’s close relationship with U.S. President-elect Donald Trump. At $350 a share, Tesla is expected to add nearly $87 billion to its value if profits hold. Since Trump’s election victory was announced last Wednesday, the stock has jumped nearly 28%, surpassing the $1 trillion market value for the first time in two years.
Analysts said Elon Musk has been supporting Donald Trump for months in the hope that his close ties to the now president-elect will allow his companies to benefit from the new administration.
The billionaire also contributed $119 million to the pro-Trump campaign, federal records show. From Tesla’s electric cars to SpaceX rockets and Neuralink brain chips, Musk’s business activities depend heavily on government regulations, subsidies or politics. Tesla’s self-driving technology has been under scrutiny from safety regulators as Musk has tried to shift the company’s focus to autonomous driving and a robotic axis. Also in September, Donald Trump said he would set up a government efficiency commission headed by Musk to cut federal spending. Musk’s potential influence in government could be significant for his other projects, such as the Starlink broadband system, given his role as a prime contractor for the U.S. Department of Defense.
Tesla, Inc (NASDAQ:TSLA) also reported third-quarter earnings results on October 23, 2024 that beat analysts’ estimates, though revenue fell short of expectations. Shares jumped 17% when the results were released. The company’s total sales increased 8% year-over-year to $25.18 billion. After all expenses, the company’s net profit rose to $2.17 billion. Automotive revenue rose 2% to $20 billion and Tesla vehicle warranty repairs jumped 29% to $2.79 billion. Commenting on the earnings, CEO Elon Musk said his «best guess» is that «vehicle growth» will reach 20% to 30% next year due to «cheaper vehicles» and «the advent of autonomy.» Analysts polled by FactSet expected total deliveries to rise by about 15% next year to 2.04 million. These facts have caught the attention of multinational investment corporations and private investors, where the average target price with a high estimate for the short to medium term investment horizon has been set at $400 per share.