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Why Smart Traders Are Betting on Tesla’s 50% Surge: The Musk and Trump Effect Unleashed!

Hannah Perry | December 17, 2024

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Why Traders Should Bet on Tesla: A 50% Potential Upswing with Musk and Trump

Tesla Inc. (TSLA) is solidifying its position as a front-runner in the electric vehicle (EV) industry and traders who are vigilant about market trends should prepare for an exhilarating ride. With the winds of political change blowing favorably for CEO Elon Musk, Wall Street is buzzing with speculation that TSLA could see a significant boost—potentially up to 50% in coming years. Buckle up, because the numbers are compelling, and the signals are pointing to an electrifying future for Tesla!

The Game-Changing Trump Effect

Analyst Dan Ives from Wedbush recently raised Tesla’s stock price target to $515 from $400—an impressive 29% increase. Ives is betting big on the idea that the election of Donald Trump as President could radically alter the landscape for autonomous driving and AI initiatives being spearheaded by Tesla. In fact, Ives describes this shift as a “total game changer,” setting a bullish narrative for the next few years. If everything aligns as Ives envisions, he projects that TSLA could rocket to an astounding $650 per share by 2025, indicating upside potential of nearly 49% from the previous close.

Charting the Tesla Surge

On Monday, shares of Tesla closed at a record $463.02 after climbing more than 6.1% in a single day—marking a staggering 82.6% surge since Trump’s election victory on November 5. 

This extraordinary performance is no fluke. Ives outlines that the ambitious plans for the launch of the Cybercab robotaxi service—a significant revenue generator—have the potential to either stay on track for 2026 or be accelerated to a 2025 rollout, thanks to a more favorable regulatory environment under Trump. If successful, this endeavor could genuinely be the “golden goose” for the company, enriching its burgeoning EV empire.

Market Cap: From $1.47T to $2.1T

Ives’ projections would put Tesla’s market capital at a staggering $2.1 trillion if the stock hits that bull case target of $650. As it stands, Tesla’s market cap is already impressive at around $1.47 trillion. The analyst estimates that the AI and autonomous opportunities alone could be valued at a whopping $1 trillion for Tesla, which is thrilling news for traders who are eyeing the long-term potential.

Navigating Potential Risks

However, not all that glitters is gold. Ives himself acknowledges that there are risks at play, particularly concerning the demand from China, which is a crucial market for Tesla. Trump’s proposed tariffs could pose challenges, sparking fears of a trade war. Yet, Ives remains optimistic that Tesla might receive some “carve outs” that would enable it to navigate any tariffs with relative ease.

Moreover, a recent Kelley Blue Book report revealed that Tesla produces “the most American” of cars—adding another layer of positive sentiment as it relates to possible tariff exemptions.

The Analyst Consensus: Divergence Ahead?

While the buzz is positive, it’s worth noting that Ives stands apart from the majority of analysts on Wall Street. Among 57 analysts surveyed by FactSet, only 25 maintain a bullish outlook on Tesla, while 14 are bearish, and 18 are neutral. Ives’ base-case price target of $515 significantly exceeds the average analyst target of $283.62, suggesting a potential downside of around 38% from current stock levels. This divergence highlights the potential volatility that traders should remain aware of as they craft their trading strategies.

Concluding Thoughts

In the exhilarating world of trend-following trading, Tesla’s stock is undoubtedly a beacon for momentum seekers. With the prospect of accelerated regulatory breakthroughs and sound fundamentals, TSLA appears poised for significant gains in the upcoming years. However, as any savvy trader knows, diversifying your position while keeping an eye on market fluctuations is key. Stay ahead of the curve and align your strategy with emerging trends; your trading game may just get that electric jolt it needs!