Here’s Trump’s move that could disrupt Tesla and its stock: UBS analysts weigh in
The surge in Tesla (TSLA) shares following Donald Trump’s victory in the 2024 U.S. Presidential Election was driven more by "animal spirits" and market euphoria than any substantial improvement in the electric vehicle (EV) giant’s fundamentals, according to analysts at UBS led by Joseph Spak.
In a note, they highlighted the buying frenzy that propelled TSLA stock immediately after Election Day.
The rally seems almost predictable, given that Tesla’s CEO, Elon Musk, was a prominent supporter—and arguably a major backer—of Trump’s campaign to reclaim the White House.
Trump’s electoral win has sparked speculation among traders about potential rewards for Musk, whose ventures span Tesla, SpaceX, X (formerly Twitter), Neuralink, The Boring Company, and xAI.
In the days following the election, Tesla’s stock surge had a noticeable impact on the broader U.S. Big Tech market, driving Tesla’s market capitalization beyond the trillion-dollar threshold.
Already, Musk appears to be reaping some political benefits. One notable move is his appointment as head of the Department of Government Efficiency (DOGE), a new federal initiative under Trump. Musk will share leadership of this department with Vivek Ramaswamy, former Republican presidential contender and co-founder of Strive Asset Management.
The Trump Effect: Boom for Tesla, But Will It Last?
Tesla’s market cap has climbed by more than $350 billion since the election, according to UBS, with shares rallying over +32% in the past month. Over the last six months, TSLA stock has gained +64%, while its year-to-date performance is up approximately +38%.
However, UBS’s Spak has flagged a looming risk: the potential removal of EV tax incentives under Trump’s second administration.
While Trump’s policies might favor Musk’s ventures in AI and self-driving technology, Tesla currently lacks a viable robotaxi offering that could capitalize on such opportunities.
This could force Tesla to cut vehicle prices to maintain competitiveness, posing a challenge to its margins.
Spak maintained a “sell” rating on TSLA despite raising the stock’s price target from $197 to $226—a modest increase compared to its current trading price near $338. On Wall Street, TSLA saw a slight rebound today after closing down -3.9% in the previous session, settling at $338.59.
Spak’s cautionary tone underscores the fragility of Tesla’s recent gains, suggesting the rally was fueled primarily by “animal spirits and momentum” rather than durable business fundamentals.
Original article published on Money.it Italy 2024-11-26 15:15:29. Original title: Tesla: l’effetto Trump sulle azioni di Musk si sta sgonfiando? Ecco la minaccia EV secondo UBS
