Tesla hits $1 trillion mark: Musk's Trump ties fuel surge
Tesla's market capitalization, which is dominated by Elon Musk, surpassed $1 trillion on the New York Stock Exchange on Friday. Shares of the electric car manufacturer are soaring following Donald Trump's election as president, which Musk strongly supported during the campaign.
Tesla shares are rising more than 5 percent on Friday, surpassing a value of $1 trillion for the first time in history.
Elon Musk gains from Trump's victory
Investors are betting that Tesla’s CEO, Elon Musk, will benefit from a potential Trump administration. Musk was Trump's most vocal promoter during the campaign and donated over $130 million to help him win the election.
As of Tuesday's close, Tesla had a market capitalization of $807.1 billion. Before this week's rally, the car manufacturer's shares had risen about 1 percent over the year. Now, Tesla's stock price has increased approximately 26 percent since the beginning of the year.
Tesla joins the growing club of tech companies that are now worth over $1 trillion. This group includes Nvidia, Apple, Microsoft, Alphabet, Amazon, and Meta. All these companies, except for Meta, already have a value exceeding $2 trillion.
Dan Ives, an analyst at Wedbush Securities, said that a potential Trump administration might mean fewer regulations for Tesla and other companies. Trump previously stated that he might cut the federal tax credit on electric vehicles, valued at $7,500, and Ives believes this could benefit Tesla in the long run.
"Tesla has the scale and scope that is unmatched. This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players (BYD, Nio, etc.)," Ives wrote in a note to clients this week.
