Stocks of Tesla Extend Election Surge, Boosting Elon Musk's Wealth by $67 Billion

Elon Musk’s high-stakes gamble on Donald Trump's return to the presidency is proving immensely rewarding, as Tesla Inc.’s stock has soared following the recent election results. Shares of Tesla surged by 7.4% in premarket trading on Monday, bringing them close to their highest level since April 2022. This impressive performance marks a significant rally for Tesla, with shares up 37.2% since election day—a streak that would represent the stock’s best four-day gain since March 2020, when it climbed nearly 40%.

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Investors appear to be optimistic about Musk’s substantial support for Trump’s re-election efforts, as Musk invested both financially and personally in promoting the former president. Musk’s millions of dollars in donations, as well as his time commitment, underscored his alignment with Trump’s vision and policies. Although the precise impact of Trump’s victory on Tesla’s business remains uncertain, the positive stock momentum has already proven financially advantageous for Musk.

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According to recent disclosures, Musk owns 715,022,706 shares of Tesla, equivalent to 20.5% of the company’s outstanding shares. At current premarket prices, the value of Musk’s Tesla stake has soared by approximately $66.9 billion since the election. This increase has further solidified Musk’s status as the world’s richest person, positioning him even further ahead of Amazon founder Jeff Bezos, according to Bloomberg’s Billionaires Index. As of Sunday, Musk’s net worth exceeded Bezos’s by over $80 billion.

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Analysts are weighing in on how Trump’s win could impact Tesla’s future growth. Stifel Nicolaus analyst Stephen Gengaro believes that certain policy changes under Trump could work in Tesla’s favor, especially if the government closes a $7,500 leasing loophole while keeping the federal EV tax credit intact. If this occurs, Tesla’s Model 3 would qualify for incentives, while comparable models from other automakers might not.

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This, Gengaro argues, would help Tesla strengthen its competitive position. Furthermore, he notes that Tesla’s robust market presence might shield it from any potential adjustments to federal electric vehicle mandates under Trump’s administration. Additionally, Gengaro points out that Trump might expedite regulatory approvals for full self-driving initiatives, a key component of Tesla’s long-term strategy.

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Another prominent analyst, Dan Ives from Wedbush, raised his price target for Tesla’s stock by 33% to $400 per share, suggesting a further 16% potential upside. If realized, this increase would add an estimated $39.3 billion to Musk’s stake in the company, making Ives the most bullish Tesla analyst on Wall Street. Ives believes Trump’s presidency could have transformative effects on Tesla’s journey toward autonomous driving and artificial intelligence, creating new opportunities for the company over the next few years.

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Meanwhile, TD Cowen’s analyst Jeff Osborne noted that Musk’s backing of Trump and the Republican Party, financially and otherwise, may yield benefits, though specific gains remain uncertain. Osborne suggests there could be some policy relief on the horizon for U.S.-manufactured electric vehicles, which would align with Musk’s goals for Tesla. Osborne also envisions that the EV industry may continue to be seen as a crucial driver of domestic innovation, benefiting from political support that encourages manufacturing growth and strengthens the supply chain within the United States.

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While the tangible advantages of Trump’s win for Tesla may take time to materialize, Musk has ample reasons to be pleased, given the substantial financial gains he has already reaped. As investors remain encouraged by the prospects of a Trump administration potentially favoring Tesla, Musk’s bet on Trump’s comeback is looking more and more like a masterstroke. Whether through favorable tax policies, support for autonomous vehicle technology, or an emphasis on domestic innovation, Tesla’s momentum could continue to build under these political conditions, bringing further financial rewards to its CEO.

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