Tesla Inc. (TSLA) kicked off the week with a bang, seeing its stock price climb by a remarkable 7.23% in pre-market trading on Monday. This surge follows the company’s monumental achievement of reaching a $1 trillion market capitalization last Friday, solidifying its position as a dominant force in the electric vehicle industry.
The rally in Tesla’s stock price is particularly noteworthy considering the substantial losses incurred by hedge funds due to their short positions on the company. These losses have amounted to a staggering $5.2 billion from election day through the close of trading last Friday. This financial setback for hedge funds is largely attributed to the close ties between President-elect Trump and Tesla CEO Elon Musk.
Data from S3 Partners reveals that many hedge funds had already begun to reduce their short positions on Tesla in the months leading up to the election. This strategic adjustment coincided with Musk’s public endorsement of Trump on July 13. However, those who maintained their short positions have faced significant financial repercussions.
Adding fuel to the fire, Wedbush analyst Dan Ives on Monday raised his price target on Tesla from $300 to $400. Ives believes that Donald Trump’s victory in the Presidential election could be a gamechanger for Tesla, potentially propelling the EV giant to new heights under the leadership of billionaire Musk.
The ongoing rally in Tesla’s stock price is a testament to the company’s growing influence and the market’s confidence in its future prospects. Analysts at Wedbush have suggested that a Trump presidency could be a positive development for Tesla, despite the potential for broader impacts on the electric vehicle industry, including the elimination of rebates and tax incentives. Tesla’s unmatched scale and scope in the EV sector position it to weather these potential challenges and emerge as a dominant force in the industry.
While the future of Tesla’s stock price remains uncertain, the company’s recent achievements and the potential for a Trump presidency to further its growth trajectory have undoubtedly captured the attention of investors worldwide.
