Tesla stock hits record high, boosted 69% since Trump victory

U.S. President-elect Donald Trump and Elon Musk attend the launch of the sixth test flight of the SpaceX Starship rocket in Brownsville, Texas, November 19, 2024.

Brandon Bell | Via Reuters

Tesla shares hit an all-time high on Wednesday, surpassing their previous high set in 2021, sparked by a post-election rally and Wall Street's increased enthusiasm for Elon Musk's electric vehicle company.

The stock hit a closing high of $424.77, about $15 higher than its previous high of $409.97 from November 4, 2021.

Tesla's market value is up about 71% this year, with almost all of those gains coming since Donald Trump's election victory early last month. The stock's 38% rise in November marked its best monthly performance since January 2023 and its 10th best performance on record.

Musk invested $277 million in a pro-Trump campaign effort, according to Federal Election Commission filings, and turned his support for the Republican candidate into another full-time job before the election, financing a fundraising operation. State to register voters and using its social networks. X platform to constantly tout its favorite candidate, often with misinformation.

The world's richest person, who has seen his net worth rise to more than $372 billion, according to Forbes, is set to lead the Trump administration's “Department of Government Effectiveness,” alongside the Former Republican presidential candidate Vivek Ramaswamy.

His new role could give Musk power over federal agency budgets and staffing and the ability to push for the elimination of troublesome regulations. Musk said during a Tesla earnings conference call in October that he intended to use his influence with Trump to establish a “federal approval process for autonomous vehicles.” Currently, approvals occur at the state level.

“The stock is reacting to Trump's rise,” Craig Irwin, an analyst at Roth MKM, told CNBC's “Squawk on the Street” last week. Irwin had just increased his price target from $85 to $380, writing in a report that “Musk's genuine support for Trump likely doubled Tesla's enthusiast base and bolstered the credibility of a demand shift.” .

Goldman Sachs analysts raised their price target on Tesla on Wednesday, joining a parade of companies that have raised their price expectations or rating on the stock. Goldman analysts wrote that “the market is taking a more forward-looking approach to Tesla, particularly regarding its AI opportunity.”

Analysts at Morgan Stanley and Bank of America have also issued bullish reports recently.

Since Trump's victory, Musk has accompanied the president-elect to meetings with world leaders and has begun advising him and members of Congress on federal agencies, regulations and budget items that the billionaire would like to eliminate or reduce considerably.

Tesla's surge to a record marks a dramatic turnaround from its performance earlier this year. The company's shares plunged 29% in the first three months of 2024, the worst quarter for the stock since late 2022 and the third worst since Tesla's IPO in 2010. At the time, Investors were concerned about Tesla's core business, which reported falling revenue in the first quarter in part because of increased competition from China.

In its October third-quarter earnings report, Tesla reported an 8% year-over-year increase in revenue, which was slightly below estimates. However, the company reported better-than-expected earnings, and Musk said on the conference call that his “best guess” is that “vehicle growth” will reach 20 to 30 percent next year, due to ” lower-cost vehicles” and the “advent of autonomy”. This forecast was ahead of analysts' forecasts.

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