Tesla's stock price surges to a new high, increasing by 64% since the 2016 presidential election.

• On Wednesday, Tesla's stock price surpassed its previous high for 2021 as shares rose nearly 3%.
• Since Donald Trump's election victory last month, the stock, which had doubled in value last year, has increased by approximately 66% in 2024.
• Tesla's credibility was boosted and its pool of enthusiasts grew due to Musk's authentic support for Trump, according to analysts at Roth MKM in a report on Dec. 2.

On Wednesday, shares of electric vehicle company Tesla reached an all-time high, surpassing their previous record set in 2021, due to a post-election rally and increased enthusiasm from Wall Street for Elon Musk.

On Nov. 4, 2021, the stock reached its highest finish of $409.97, and was currently trading at $415, 50 cents above its previous peak, and on track to close higher.

Tesla's market value has increased by approximately 66% this year, with almost all of those gains occurring after Donald Trump's election victory in November. The stock's 38% rally in November was its best monthly performance since January 2023 and its 10th best on record.

According to Federal Election Commission filings, Musk invested $277 million in a pro-Trump campaign effort and devoted his time and resources to promoting the Republican nominee, using his social media platform X to spread misinformation and register voters in swing states.

The world's richest person, with a net worth of over $360 billion, has been appointed to lead the Trump administration's "Department of Government Efficiency," along with onetime Republican presidential candidate Vivek Ramaswamy.

Musk's new role may grant him control over federal agencies' budgets, workforce, and the authority to advocate for the removal of burdensome regulations. During a Tesla earnings call in October, Musk disclosed his plan to leverage his influence with Trump to create a federal approval process for autonomous vehicles, which currently takes place at the state level.

"Craig Irwin, an analyst at Roth MKM, stated on CNBC's "Squawk on the Street" that the stock is responding to the Trump bump. Irwin had previously increased his price target to $380 from $85, stating in a report that Musk's authentic support for Trump likely doubled Tesla's pool of enthusiasts and lifted credibility for a demand inflection."

Goldman Sachs analysts raised their price target on Tesla on Wednesday, following in the footsteps of other firms that have increased their expectations or ratings for the stock. The analysts stated that the market is adopting a more optimistic outlook on Tesla, particularly with regards to its AI potential.

Recently, Morgan Stanley and Bank of America have released optimistic reports.

Since Trump's election, Musk has been attending meetings with world leaders and advising the president-elect and members of Congress on which federal agencies, regulations, and budget items he would like to eliminate or significantly reduce.

Tesla's surge to a record marks a dramatic turn from its poor performance at the start of the year. The company's shares plummeted 29% in the first three months of 2024, the worst quarter for the stock since the end of 2022 and the third worst since Tesla went public in 2010. At the time, investors were worried about Tesla's core business, which reported declining revenue in the first quarter due to increased competition from China.

Tesla's third-quarter earnings report in October revealed an 8% year-over-year revenue increase, although it fell slightly below expectations. Despite this, the company exceeded expectations with its profit, and Musk predicted that vehicle growth would reach 20% to 30% next year due to lower-cost vehicles and the advent of autonomy. This forecast was ahead of analysts' predictions.

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