424.7 dollars is the record figure reached by Tesla’s stock this Wednesday, December 11 on the NASDAQ, its highest level reached since the start of its trading. The increase is even 69% since the election of Donald Trump on November 5. Why are investors so optimistic about the manufacturer? Let’s take stock.
Autonomous driving in sight
According to the American media BloombergElon Musk’s proximity to the president plays an important role in this enthusiasm. While the Tesla boss will co-lead the Department of Government Efficiency (DOGE), he is now at the heart of power. Some hope that future government plans to relax rules for autonomous vehicles can boost the business.
Quoted by our colleagues, Cantor analyst Fitzgerald Andres Sheppard underlines: “We are becoming more bullish on Tesla’s Robotaxi segment, following President-elect Trump’s plans to potentially develop a federal framework for autonomous vehicles in the United States”. “Elon Musk’s entry into the political sphere has broadened investors’ thinking about Tesla’s fundamental prospects”adds Adam Jonas, analyst at Morgan Stanley.
Moreover, the CEO himself announced the color. During a conference call organized last October, he indicated that he wanted to take advantage of his influence with Donald Trump to try to put in place “a federal approval process for autonomous vehicles”. Currently, these authorizations are in fact allocated at the level of each State.
Why should we remain cautious?
This new development for Tesla’s action reflects on its manager. His fortune thus reached 440 billion dollars. A sum that seems impossible for ordinary mortals to grasp and which represents a level of wealth never before reached in the history of humanity.
However, the past has taught us to remain cautious. While Tesla’s price already exceeded $400 at the end of 2021, its value had finally melted like snow in the sun following successive bad news. Fears of inflation and the rise in interest rates had dampened traders’ enthusiasm. The share value therefore stood at $108 at the start of 2023.
Note also, the election of Donald Trump launches a phase of uncertainty. If the promised tax cuts and deregulation greatly please the market, its protectionist inclinations and its rather unpredictable temperament also raise concerns.
What to remember:
- Tesla stock breaks new records
- Investors believe Elon Musk could get breakthroughs on autonomous vehicles
- Nothing is written in stone and only the future will tell us if the increase continues
