Tesla (TSLA) CEO Elon Musk’s endorsement of President-elect Donald Trump is a boon for Tesla shareholders today. But the question investors are asking is what this evolving relationship will mean for them in the years to come.
Mr Trump has a close relationship with Musk, who has supported Mr Trump both rhetorically and with major financial commitments.
Musk — the world’s richest man — recently added a total donation of $43.6 million to America PAC, the Republican super PAC, in early October. His total known political spending this year is now more than $132 million, Yahoo Finance reported.
It was one of the largest sums ever given to a political candidate and party. In return, Mr. Trump even promised Mr. Musk a position in his administration, saying that Musk could head a commission to make government more efficient.
Trump mentioned Musk in his election victory speech early Wednesday morning, calling him a “super genius” and declaring that “we have to protect our geniuses. We don’t have many of them.”
In the immediate aftermath of Mr Trump’s victory, shares of Tesla (the electric carmaker of which Musk is CEO and owns a 13% stake) surged, rising about 15% in morning trading on Wall Street, adding $15 billion to Musk’s fortune.
“We believe a Trump win could add $40-$50 per share to Tesla’s stock,” said Wedbush’s Dan Ives, noting that the company could surpass a $1 trillion market cap “if autonomous driving/FSD technology accelerates starting in 2025.”
Tesla's robot taxi ambitions, while still nascent and in the early testing stages, could get a big boost from the White House.
“We believe a Trump victory will help accelerate regulatory approval of the company’s autonomous driving technology,” CFRA’s Garrett Nelson wrote on Wednesday.
Nelson significantly raised his Tesla price target from $265 to $375 and upgraded the stock to "Buy" following the election.
