Elon Musk's companies Tesla, X Platform, and SpaceX are all expected to benefit from Trump's victory, with analyst Dan Ives believing that there is still a 20% upside potential for Tesla's stock price. As the 'top hero' of Trump's victory, Musk's own political resources are also set to rise rapidly.
Republican presidential candidate Trump announced his victory in the 2024 presidential election in the early hours of the 6th. However, the biggest winner of this White House battle may not be Trump, but rather his main backers and 'trailblazer' Musk.
On November 6th local time, 'diehard fan' of Musk and American investment bank Wedbush analyst Dan Ives tweeted, expressing his bullishness towards Musk and Tesla without reservation:
The biggest beneficiary of Trump's victory will be $Tesla (TSLA.US)$ / Musk.
We believe that Trump's victory is negative for the electric car industry, as EV discounts/tax incentives will be cancelled, but the impact on Tesla is positive, as Tesla has a huge advantage in scale/price.
Trump's victory could lead to a $40-50 increase in Tesla's stock price.
Tesla's market cap has increased by $300 billion since its low point in April. In addition, since Musk publicly expressed support for Trump on his social platform X, Google users' interest in him has doubled. Analysts predict that this election will bring more car sales to Tesla, more advertising orders to X, and more support to Musk's American aerospace company, SpaceX.
The benefits are not limited to this. If Trump wins, Musk's invaluable political resources will be unparalleled. On the other hand, if Harris wins, as Musk has joked before, he might end up in jail.
Starting from July this year, Musk officially joined the Trump camp, betting his entire fortune on Trump winning. Three months later, this bold bet finally paid off handsomely.
Now, if you want to know how Musk feels, just take a look at the tweet he posted today:
The future will be very bright! (Musk also kindly tagged 'big rocket' for Trump)
Tesla continues to push the boundaries of imagination.
Trump may accelerate the introduction of measures supporting autonomous driving technology after taking office, which is a great boon for Tesla, which focuses on Full Self-Driving (FSD) technology.
Furthermore, Trump advocates for a significant increase in tariffs, which may further restrict the influx of affordable electric cars from abroad into the US, helping Tesla maintain its leading position in the US market (with a market share of over 50%).
It is worth mentioning that even if Harris wins the election, Tesla can benefit from it because the Democratic Party advocates clean transportation.
Therefore, regardless of who wins, Tesla is the winner.
Before the election day, Ives gave Tesla an 'outperform the large cap' rating with a target price of $300, around 20% higher than Tesla's closing price on Tuesday.
According to the rating website Tipranks, Ives's views are supported by 10 other analysts, with an additional 16 analysts suggesting to hold and 8 analysts recommending to sell, resulting in a 'hold' consensus rating for Tesla.
One step closer to the 'Mars dream'
From the perspective of the space market, a Trump victory would also be beneficial for Musk.
Musk has expressed that under Democratic leadership, the possibility of SpaceX realizing the 'Mars dream' is not high, while under Republican leadership, SpaceX may receive greater support from government agencies.
Regardless of the election results, NASA and SpaceX are closely intertwined.
According to federal records, since 2019, NASA has taken on nearly $10 billion in debt to SpaceX. However, if Harris takes office, she may not agree to take on huge debts for SpaceX.
Political capital expanding, Musk hints at entering politics?
If Trump allows Musk to enter the government department for an important role, Musk is expected to transform from a commercial giant to a political figure.
Trump previously mentioned that if he returns to the White House, he will require Musk to lead a Department of Government Efficiency. Musk later responded that if Trump gets elected, he can find $2 trillion in budget cuts in the government, fundamentally reshaping government spending.
After today's election, Musk posted a meme on X platform of himself 'holding a sink in the Oval Office' with the caption 'let it sink in (Sink has a sink and sinking double meaning)', hinting at entering politics. In 2022, when Musk took over Twitter, he promised to downsize and even entered the Twitter building holding a sink.
However, entering the government department also means that Musk may have to keep his distance from Tesla and SpaceX. Without Musk at the helm, Tesla's value is bound to take a big hit. Compared to the automotive business, Tesla's stock price relies more on Musk's 'big picture'. In addition, unlike the whimsical executives, politicians have to deal with the trivial matters of dealing with Congress, even the energetic Musk may be stretched too thin.
Learning from history, Musk's political career has not been smooth. The Chief Executive Advisory Council during the Trump administration only lasted six months. The council was established at the end of 2016, led by Stephen Schwarzman, Chairman and CEO of Blackstone Group, of which Musk was a member.
Even if Musk gives up the government position, as Trump's 'number one hero' for winning the election, his political resources will also rise rapidly.
Editor/Somer
