Musk's bet on Trump is ushering in a 'harvest season', and Tesla's stock price has soared.

Since the USA election day on November 5, $Tesla (TSLA.US)$ the stock price has cumulatively risen by 75%, and in the past six months, the stock price has more than doubled.

How can Tesla's recent surge be understood?

On December 19, Barclays Analysts Michael Tyndall, Pushkar Tendolkar, and others stated in a report that the surge in Tesla's stock price is almost related to $Bitcoin (BTC.CC)$ The surge is strikingly similar.

Barclays believes that after the election, Tesla's stock price nearly doubled, with the PE rising from 80 times before the election to 145 times, while its fundamentals have not shown significant improvement—this phenomenon reflects that Tesla's narrative has been exaggerated, especially in the fields of autonomous driving and AI.

The election did not boost the fundamentals; the frenzied sentiment drove stock prices to soar.

Barclays stated in its report that the rise of Tesla and Bitcoin is driven by a similar logic: both are fueled by investors "buying into the story madly."

The report suggests that for investors, Tesla's appeal lies not only in the automotive sector but also in the company's potential in areas such as Siasun Robot&Automation and AI. However, if Tesla is regarded as an AI company, it is still far from$NVIDIA (NVDA.US)$the over 300% increase so far.

The report indicated that although the election drove Tesla's recent surge, the policies of the Trump administration may be "a mixed bag" for Tesla, and the fundamentals are not as "positive" as the market imagines.

First, Trump advocates cutting tax incentives for new energy vehicles, which may hurt Tesla's competitors more significantly, while it is expected that Tesla's share of about two-thirds of the USA market sales will also be dragged down.

Second, Tesla is expected to benefit from the easing of autonomous driving regulations, but at the same time, if the easing happens before Tesla achieves full technological progress, it may actually benefit Tesla's main competitor in autonomous driving, Waymo.

The report also stated that Musk's "successful alignment" brings a premium to Tesla's stock price while also introducing corresponding risks since Tesla is the only publicly traded company in Musk's business empire.

Barclays also believes that the rise in Tesla's stock price is driven by technical factors, especially the unusual activity in the options market, which led to a phenomenon known as "gamma squeeze."

"Gamma squeeze" refers to the situation where the increase in Call Options Bid leads to a rise in stock prices, causing more Options to become in-the-money, and traders continue to Buy Stocks to hedge risk exposure, resulting in further stock price increases.

The report states that since the election, the nominal trading volume of Tesla Call Options has averaged 100 billion USD. On election day, the nominal trading volume of Tesla Call Options reached as high as 245 billion USD, while the trading volume of Other Options in the market only reached 310 billion USD.

Moreover, after the election, the call-put ratio of Tesla Options was 1.7 times, far above the average level of 1.4 times in 2024, reflecting that investors want to take advantage of leverage to chase prices.

The bank stated that during the period when the stock rose by 4-5% (which is a Market Cap fluctuation of 50-60 billion USD), the excessive activity in Options played a certain role.

HSBC Analysts also mentioned in the latest report that compared to the "Seven Sisters" of Technology Stocks, Tesla's fundamentals cannot support the current stock price trend.

For the upcoming fourth fiscal quarter, HSBC expects Tesla to struggle to maintain the good performance of the third quarter, with gross margin potentially declining by 140 basis points.

Additionally, considering the general decline in Tesla's market share in major markets over the past year, the divergence in sales expectations among various Institutions, the uncertainty surrounding new models, and the limitations of established production capacity, HSBC believes Musk's expectation of a 20%-30% sales growth for Tesla by 2025 is "unrealistic."

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Editor/rice