Tesla Stock Soars as Musk's Trump Ties Fuel $1 Trillion Valuation Leap

Tesla's market capitalization surged past the $1 trillion milestone following a notable rally in its stock price, driven by Donald Trump's U.S. presidential election victory. Investors are optimistic that Trump's presidency will be advantageous for Tesla CEO Elon Musk, who played a significant role in supporting Trump's campaign. Consequently, Tesla shares soared by 14.75% to $288.53, marking a high not seen since July 2023.

This meteoric rise in Tesla's valuation further boosts Musk's personal wealth by approximately $20.9 billion, solidifying his status as the world's richest individual with an estimated fortune of nearly $286 billion. The close relationship between Musk and Trump during the election campaign was highlighted by Trump's public acknowledgment of Musk's support, considering Musk a rising star.

Musk's support for Trump is expected to benefit Tesla, as analysts predict regulatory advantages for the automaker, particularly in the realm of autonomous driving technologies. Analyst Garrett Nelson at CFRA Research increased Tesla's price target from $265 to $375, indicating a potential upside of over 30%. Nelson remarked that Tesla and Musk are poised to be the major beneficiaries of the election outcome, which could expedite regulatory approvals.

However, a Trump Presidency could also result in a reduction or elimination of electric vehicle (EV) tax credits, potentially affecting other EV companies negatively. Consequently, stocks of competitors such as Rivian and Nikola saw declines of over 8% and nearly 2%, respectively. Analyst Dan Ives emphasized that while Tesla might greatly benefit, the broader EV sector could face challenges due to potential policy changes.

In a separate development, macro trader Chris Rokos capitalized on the surge in asset prices following Trump's victory. Rokos Capital Management, his hedge fund, reported nearly $1 billion in profits in a single day, largely attributed to smart trades across various asset classes. This achievement stands as one of Rokos' best trading days since the fund's inception in 2015.

Meanwhile, Stellantis announced an increase in layoffs, reducing 400 jobs at its Detroit auto parts plant. This move aligns with efforts to streamline North American operations and ensure a robust start into 2025, as the company undergoes significant transition efforts to address underperforming sectors.