Tesla today
(As of 11:15 am ET)
- 52 week range
- $138.80
▼
$361.53
- P/E ratio
- 97.02
- Target price
- $230.18
Tesla Inc. NASDAQ:TSLA The company’s shares have risen 56.2% since Donald Trump was elected president of the United States. But a recent move of 6.6% for the week of November 18, 2024 has investors thinking the stock could rise to $400 or even higher.
News has emerged that the Trump administration plans to prioritize creating a regulatory framework for fully driverless vehicles (i.e., autonomous vehicles) at the federal level, rather than leaving it up to individual states.
The importance for Tesla is that a federal structure could provide an easier path for Tesla to deploy autonomous cyber taxis. For existing Tesla owners, this will create an out-of-state software sales process.
Tesla’s path to an autonomous future
It’s no secret to TSLA shareholders that Tesla founder and chief executive officer (CEO) Elon Musk has made the development of autonomous technology and artificial intelligence a cornerstone of his business strategy moving forward. In theory, this news increases the likelihood that Musk’s vision will become a reality.
But investors are wondering how long that might take, especially for a stock that trades at 171 times forward earnings. Four years may be long enough. The Trump administration will likely make autonomous driving standards less stringent. Tesla’s full self-driving (FSD) technology is currently at Level 2, and it will likely only need to reach Level 4 before it can gain regulatory approval for its cybercabs.
Musk continues to win
Another piece of news that’s helping support TSLA stock is that the incoming Trump administration is expected to repeal the Biden administration’s $7,500 tax credit on electric vehicles. This was done to encourage the adoption of electric vehicles (EVs) in the United States. However, ending subsidies was one of Trump’s main campaign promises.
This is where Tesla will likely benefit due to the company’s position in the US electric vehicle market. That is, it is a leader in market share and one of the few profitable companies. This gives the company the opportunity to produce electric vehicles at a lower cost, negating current subsidies.
Politics makes strange bedfellows
Some critics have speculated that the recent gains may be due to Elon Musk’s support for the Trump campaign. Musk, once popular among left-leaning politicians, has attracted attention for his changing views on topics such as free speech.
You can’t buy the stock from a person, but there is at least some bullish sentiment in TSLA stock as the election sees investors using Tesla as evidence of their belief that the next four years will mean Tesla realizing this idea . that it is more than just a car company and should be valued on par with other technology stocks. Yes, but this is not yet reflected in the financial statements.
Buy rumors, sell news
Since closing at around $347 on November 18, Tesla shares have fallen to around $329 but have recovered most of that loss. This was to be expected, as investors digested the rumors and realized that the payoff from this week’s news would be several years away.
Tesla stock forecast today
$230.18
-32.41% DisadvantageHold
Based on ratings from 39 analysts
| High forecast | $400.00 |
|---|---|
| Average forecast | $230.18 |
| Low forecast | $24.86 |
Tesla stock forecast details
Analysts are raising their price targets for TSLA stock following the company’s October earnings report. However, it was only after the latest news that one analyst, Wedbush’s Dan Ives, stuck his neck out and is now calling for Tesla shares to rise to $400. This will be 16% higher than its price at the time of this writing. It’s also markedly 73% higher than MarketBeat analysts’ consensus price estimate.
Ultimately, an investment in Tesla at this point is an investment in Elon Musk by proxy. Musk’s star may never shine brighter, but like all stars, it will fade… eventually. Tesla stock has always been a actively traded stock and will likely continue to be so. Whether the Musk factor is worth paying 171 times forward earnings for TSLA stock as an investment is a question only you can answer.
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