Tesla Stocks Rise as Musk-Trump Ties Boost Investor Confidence

Tesla Inc. (NASDAQ:TSLA) shares experienced a significant increase in pre-market trading on Monday, rising over 7% and continuing an impressive rally. This surge occurred as investors anticipated potential benefits for the electric vehicle manufacturer in light of CEO Elon Musk's support for recently elected President Donald Trump. The company's share price reached $344.50, indicating that if earnings remain stable, Tesla's market value could increase by more than $74 billion.

Since the announcement of Trump’s victory in the presidential election last Wednesday, the company's shares have risen approximately 28%, pushing Tesla's market value above $1 trillion for the first time in two years. Prior to the election results, Tesla's stock had increased by just over 1% year-to-date.

Analysts attribute the stock's performance partly to Musk’s endorsement of Trump and expectations that their companies could thrive under the new administration. According to federal records, Musk made significant financial contributions to Trump's campaign and donated at least $119 million to a pro-Trump spending group.

Tesla's self-driving technology and efforts toward robotaxis have faced intense scrutiny from safety regulators. However, Trump’s proposal to form a government efficiency commission led by Musk in September could play a significant role in federal spending decisions and potentially impact Tesla's business.

Musk’s potential influence is also seen as beneficial for other ventures, such as the Starlink broadband system, especially considering major contracts with the U.S. Department of Defense.

Despite benefiting from policies opposed by Trump, such as solar energy and electric vehicle credits under the Inflation Reduction Act passed by the previous administration, the recent rally reflects investor optimism regarding the company’s outlook in light of Musk's alignment with the incoming president.