Tesla stock surged Wednesday on former President Donald Trump defeating Vice President Kamala Harris for the White House, with a Trump presidency seen as a "huge positive" for Tesla and Chief Executive Elon Musk, who campaigned extensively for the Republican candidate.
Tesla stock advanced 14.8% to 288.53, hitting an intraday high of 289.59, during market trade on Wednesday, making a move to 15-month highs. TSLA stock popped 3.5% on Tuesday to 251.44, snapping a six-session slide, rebounding from its 21-day line.
Wedbush Securities analyst Dan Ives, a longtime Tesla bull, wrote early Wednesday that a Trump presidency could be an "overall negative for the EV industry," with the potential for EV rebates and tax incentives to be repealed. However, Ives added that for Tesla "we see this as a huge positive."
"Tesla has the scale and scope that is unmatched in the EV industry and 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," Ives wrote.
The analyst believes the Trump win could add $40-$50 per share.
Elon Musk And A Trump Presidency
Musk has been campaigning for Trump and there have been discussions of him joining the Trump White House. Trump in September told the New York Economic Club that, if elected, he would establish a government efficiency commission, to be headed by Musk, Reuters reported.
However, Cantor Fitzgerald Chief Executive Howard Lutnick, Trump's transition team co-chair, last week walked back Musk's potential role by a few steps. Lutnick told CNN that Musk would be "adjacent" to the White House.
"I think adjacent to it and writing software for the government and then giving the software to the government and helping the government," Fitzgerald said.
Few analysts have broached what a Musk cabinet position would mean for Tesla, as it would bring into question the chief executive's role at the company and complicate his private investments.
"Musk getting a cabinet seat in a Trump win would be a complicated decision that would take time away from Tesla and is not what shareholders want to see," Ives told IBD Tuesday. "He can have a role, not a cabinet position."
Tesla Stock Performance
TSLA shares tumbled 7.5% to 248.98 last week, dropping below a traditional buy point of 264.86 from a cup-with-handle base, according to MarketSurge charts.
However, Tesla stock held the bulk of the prior week's 22% spike on earnings, though recently had trading around the low of the Oct. 24 gap-up day.
Tesla China sold 68,280 vehicles in October, including exports, a six-month low, according to China Passenger Car Association data released Monday. Local China sales were sluggish in October.
Meanwhile, Cathie Wood and her Ark Investment Management firm have sold Tesla stock in seven consecutive trading sessions.
Wood has sold Tesla stock every trading day since Oct. 28 when Ark Invest unloaded more than 120,000 shares, according to the company's daily trade disclosure. Over this stretch, Wood has sold 247,421 shares, including selling 2,268 TSLA shares on Tuesday and 9,984 on Monday.
As of Nov. 6, Tesla stock is the top holding in the ARK Innovation ETF with a 13.52% weight. Tesla ranks second in ARK Next Generation Internet with a weight of 8.90%. The EV company is also the top stock in ARK Autonomous Tech with weight of 13.50%.
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Tesla stock ranks third in the 35-member IBD Auto Manufacturers industry group. The stock has an 81 Composite Rating out of a best-possible 99. Shares also have an 86 Relative Strength Rating and a 78 EPS Rating.
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