You Will Drive a Tesla and You Will Love It: Tesla Stock Soars Past $320 After Elon Musk ‘Made a Bet for the Ages’

 Tesla Stock Soars Past $320 After Elon Musk ‘Made a Bet for the Ages’

Tesla stock has staged a massive—and somewhat surprising—rally since the election. And Wall Street is getting more optimistic about Elon Musk’s electric vehicle maker.

Tesla stock shot up another 8.2% on Friday to cruise past $320 a share, closing at $321.22 while the S&P 500 rose 0.4% and the Dow Jones Industrial Average gained 0.6%.

The stock hasn’t closed above $300 since September 2022. It hasn’t closed above $321.22 since April 2022. All the recent gains sent Tesla’s market value back above $1 trillion based on 3.21 billion shares outstanding—which doesn’t include options held by Musk.

Thursday and Friday’s moves followed a 15% jump in Tesla stock following Donald Trump’s presidential election win over Democratic challenger Kamala Harris. The shares have gained 29% this week alone.

Wednesday and Thursday’s gains added almost $45 a share, or $145 billion in market capitalization, for Tesla. That’s roughly equivalent to the combined market value of General Motors, Ford, and Stellantis.

Early in the election cycle, a Tesla rise following a Trump victory was far from certain, or even expected. Trump isn’t a fan of EVs, disparaging them and Biden-era EV subsidies several times in the recent past.

But Tesla CEO Elon Musk endorsed the former president’s bid to recapture the White House shortly after a failed assassination attempt in July. After that, Musk and Trump grew closer, and the entrepreneur campaigned hard for the now president-elect.

There is no reason to doubt Musk’s sincerity, but aligning himself with Trump turned out to be an incredible hedge for Tesla.

EV stocks didn’t have a good day on Wednesday. Lucid Group stock fell 5.3%, Polestar Automotive Holding shares fell 8.2%, and Rivian Automotive dropped 8.3%.

The difference between falling 8% and rising 15% for Tesla stock works out to about $185 billion in stock market value. The $37.09 rise in Tesla shares added roughly $120 billion in stock market value, exceeding the amount Musk likely donated to the Trump campaign by roughly 1,000 times. What’s more, Musk’s net worth increased by some $25 billion the day after the election.

“Musk made a bet for the ages,” said Wedbush analyst Dan Ives. He rates Tesla stock at Buy with a $300 price target.

Tesla’s Wednesday and Thursday gains leave shares up about 19% this year. They also sent Tesla stock above recent resistance—a term used by analysts who look at stock charts to get a sense of levels where investors have bought and sold stocks in the recent past.

Tesla has a “bullish chart pattern,” said CappThesis founder Frank Cappelleri. If shares can stay above $270 in the coming days, he thinks $400 could be in play in the coming months. That is a significant increase from current levels. Fairlead Strategies analyst Will Tamplin sees some additional resistance around $340.

At any of the recent levels, investors still have to think about what to pay for Musk’s EV company. The average analyst price target is about $237, roughly $60 below where the stock trades.

It isn’t all that unusual for Tesla stock to trade for higher than the average target price, however. What’s more, Tesla has its bulls. BofA Securities analyst John Murphy on Thursday raised his target price by $85 to $350. That’s the highest price among major brokers, according to FactSet, and values Tesla at about $1.1 trillion. Murphy rates Tesla stock at Buy.

He wrote that Tesla should be “indifferent” to new EV policies from a second Trump administration but could benefit from less strict regulations dealing with self-driving cars. Tesla plans to launch a self-driving cab service in late 2025.

Murphy’s target values Tesla at about 106 times the consensus 2025 earnings estimates aggregated by FactSet. Coming into Thursday trading, Tesla shares fetched about 76 times estimated earnings, far higher than the market’s 21 times multiple. Tesla’s earnings, of course, are expected to grow much faster than the market, justifying a higher multiple.

Earnings growth has to accelerate for Tesla stock to maintain recent momentum into 2025 and beyond—no matter who is in the White House.

Tesla hits $1 trillion market cap as stock rallies after Trump win

Tesla hits $1 trillion market cap as stock rallies after Trump win