Tesla's Stock Nears $500. It Awakens Like a Slumbering Beast

$Tesla (TSLA.US)$shares surged further into record territory during Tuesday's pre-market trading session, buoyed by increasing target prices from Wall Street analysts and the approaching inauguration of Donald Trump.

Wedbush analyst Dan Ives increased his price target for Tesla by 29% for the next year on Monday, from $400 to $515. Ives views Trump's presidency as a pivotal change for Tesla's artificial intelligence and full self-driving narratives, led by CEO Elon Musk.

Ives also outlined a more optimistic scenario where Tesla's stock could climb to $650 by 2025, a 49% increase from last Friday's closing. This growth could be propelled by stronger or quicker-than-expected tailwinds from Trump's policies. Additionally, he highlighted the forthcoming launch of Tesla's Cybercab robotaxi service in early 2026 as a significant opportunity, which might even be expedited to 2025 under Trump's administration.

We estimate the AI and autonomous opportunity is worth at least $1 trillion alone for Tesla and we fully expect under a Trump White House these key initiatives will now get fast tracked as the federal regulatory spiderweb that Musk & Co. have encountered over the past few years around FSD/autonomous clears significantly under a new Trump era," Ives wrote in a note to clients over the weekend.

Furthermore, there are already signs that a Trump presidency could benefit Tesla's Full Self-Driving technology. According to a Reuters report from over the weekend, Trump's transition team is advocating for the elimination of automated-vehicle crash data, a move that would likely please Elon Musk.

Reviewing Tesla's historical stock performance and focusing on the monthly trends, the stock has seen remarkable gains following periods of consolidation. From March 2023 to February 2024, Tesla's stock price rocketed upwards by over 602%, and from December 2019 to January 2021, it surged impressively by more than 1102%. In December, Tesla achieved another notable monthly breakout with a 34% month-to-date rise. This raises the crucial question: How far will Tesla's stock go from here?

As we approach 2025, Tesla has a packed schedule in January. The company plans to announce its Q4 production and delivery figures on January 2, followed by the earnings report for 2024 on January 24. Additionally, significant management changes are anticipated in the United States on January 20th, 2025, which could impact Tesla's operations. This is particularly relevant given Elon Musk's expected appointment to the Department of Government Efficiency. Any indication of government support for Tesla in Trump's upcoming speeches could potentially boost the company's stock price further.

In the first quarter of 2025, Tesla is set to launch its advanced Full Self-Driving (FSD) technology in China and Europe, pending regulatory approvals. Securing approval for FSD in these markets would represent a significant victory for Tesla, especially in China, its largest market outside the U.S. Here, numerous competitors are vying for dominance and advancing their own driver assistance technologies, making regulatory approval crucial for Tesla's continued success and influence in the region, which could further impact Tesla's stock price.

Source: MarketWatch, Reuters

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