Elon Musk’s fortune experienced a jaw-dropping surge following Donald Trump’s victory in the 2024 election. The Bloomberg Billionaires Index revealed that Musk’s net worth leaped by a staggering $26.5 billion in a single day, propelling his total wealth to an unprecedented $290 billion. This remarkable gain can be largely attributed to a significant rally in Tesla Inc.’s (TSLA) stock price.
It’s worth noting that Musk reportedly contributed $118 million to Trump’s campaign. This investment has already been dwarfed by the returns generated from the post-election Tesla surge. On Wednesday, the electric vehicle giant saw a 16.2% surge, reaching its highest point since July 2023. Musk’s one-day gain of $26.5 billion translates to an astounding 22,357% of his recent campaign contribution.
Musk, the world’s richest man, owns approximately 20% of Tesla’s shares. Consequently, nearly 75% of his wealth is directly linked to the performance of Tesla’s stock in the market.
Tesla’s Stock Exploded Under Trump’s First Term
Tesla’s stock performance under Trump’s previous presidency was nothing short of phenomenal. During Trump’s first term, spanning from November 2016 to November 2020, Tesla shares soared by a remarkable 987%, yielding annualized returns of roughly 84%. This explosive growth transformed Musk’s net worth from $8 billion in 2016 to a staggering $107 billion by the end of Trump’s term – a 13-fold increase.
A Dwindling Growth Rate Under Biden
In contrast, Tesla’s growth has been more tempered under President Joe Biden’s administration. Since Biden’s win in November 2020, Tesla’s stock has appreciated by about 86.5%, resulting in annualized returns of around 16.2%. While still significant, this growth rate falls far short of the near 1,000% surge witnessed during Trump’s previous term.
A Clear Correlation
The stark contrast in Tesla’s stock performance under the two administrations reveals a clear correlation between the company’s success and Trump’s presidency. This observation highlights the significant impact of political climate on the valuation of specific industries and companies, particularly those operating in sectors heavily influenced by government policies.
Period
|Tesla Stock Growth
|Annualized Return
|Musk’s Net Worth Increase
—|—|—|—
Trump (Nov. 2016- Nov. 2020) | +987% | ~84% | $8B to $107B (13x)
Biden (Nov. 2020- Nov. 2024) | +86.5% | ~16.2% | $107B to $262B (2.5x)
This analysis reveals a compelling narrative of how political dynamics can significantly impact the fortunes of individuals and companies alike. While it remains to be seen how Tesla’s performance will unfold under Trump’s second term, the initial surge in Musk’s wealth suggests a potentially promising future for the electric vehicle giant.
