Tesla’s (TSLA) stock rose by $5.32 in morning trading, reaching $408.63 and extending its positive momentum from Monday. This uptick has pushed the company’s year-to-date performance into positive territory, with a gain of 1.41%. The movement aligns with a broader industry trend highlighted by research firm Rho Motion, which reported a strong year for electric vehicles. Global sales of fully electric vehicles and plug-in hybrids surged by 25.6% year-on-year, reaching 1.9 million units in December alone. Despite a slight slowdown in sales for the second month in a row, 2024 marked a record year, with 17.1 million units sold, highlighting the continued growth in the EV market.
Elon Musk’s influence across his diverse portfolio of companies plays a significant role in Tesla’s valuation narrative. Musk’s ventures span from electric vehicles with Tesla to satellites with SpaceX, and even into social media with his ownership of X. This broad spectrum of data collection and application in various fields like AI, robotics, and energy storage gives Tesla a unique edge, as noted by Morgan Stanley (MS) analyst Adam Jonas. In his recent analysis, Jonas raised his 12-month price target for Tesla from $400 to $430, outlining a bull case scenario where the stock could reach $800, emphasizing the synergy between Tesla and the broader physical AI landscape.
The stock’s performance has been particularly noteworthy since Donald Trump’s election win, with Tesla shares acting as a proxy for the ‘Trump trade’, gaining approximately 62.5%. The connection here stems from expectations that Musk’s close relationship with Trump could lead to favorable policies or regulatory environments for Tesla, particularly in the realms of autonomous driving technology and AI development.
However, this week’s gains come in contrast to recent investor behavior, which saw a rotation out of tech stocks due to scaled-back expectations for Federal Reserve rate cuts. Tesla’s shares are currently about 15% off from their all-time high of $479.86, set on December 17, indicating a cautious approach by investors amidst broader market adjustments.
Jonas’ bullish outlook on Tesla reflects not just on its market performance but also on its strategic positioning. The company’s ability to leverage data from its vehicles, its advancements in manufacturing, and its expansion into new areas like AI and robotics, are seen as key drivers for future growth. However, the stock’s recent movements also highlight the volatility and speculation that can accompany high expectations and political affiliations in the investment community.
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