Tesla stock hits new record amid another upgrade for Elon Musk’s company

Topline

Tesla shares rallied to a new all-time high on Tuesday on another highly bullish move on Wall Street, as Elon Musk’s auto company continues its meteoric rise since Donald Trump secured a second term as president with Musk’s support.

Important facts

Crucial quote

Put simply, Tesla will “benefit from favorable legislative exposure from CEO Musk’s rapprochement with the Trump administration,” Rakesh explained.

tangent

Musk, the richest man in the world thanks largely to his 13 percent stake in Tesla, celebrated the new all-time high in a post on his social media page exceeds the “weird number” of $469, Musk wrote that it was “inevitable,” with laughing emojis. It’s not the first time Musk has been embroiled in memes surrounding Tesla’s stock price, running into trouble with a 2018 post in which he claimed he had received an offer to buy the company for $420 per to take shares off the stock exchange.

Big number

730 billion dollars. This is how much market capitalization Tesla has gained since Election Day, from $807 billion to $1.54 trillion.

Cons

“Very little” of Tesla’s 91% post-election rebound “depends on the company’s third-quarter results or outlook, and most of the move is tied to CEO Musk’s sudden favor with President-elect Trump,” Truist analysts led by William Stein warned in a Monday note to clients. The strong market reaction is linked to increased hopes about what will happen to Tesla if the company achieves its ambitions. However, recent financial performance doesn’t exactly look like a company whose stock is on a rapid upward trajectory, as analyst consensus forecasts predict its weakest full-year earnings since 2021, according to FactSet. Tesla’s forward price-to-earnings ratio, which measures a company’s projected earnings over the next 12 months compared to its market capitalization, has more than doubled in the past six months, suggesting the company may be seeing rapid earnings growth must achieve in order to satisfy investors.

Forbes rating

According to our latest estimates, Musk is worth about $460 billion. He is almost twice as rich as the world’s second richest person, Amazon founder Jeff Bezos, and about $190 billion richer than before the election. Musk’s 13 percent stake in Tesla accounts for about $200 billion of his net worth.

Further reading

ForbesElon Musk is now worth more than $400 billion and is the first person to surpass that markFrom Phoebe LiuForbesTesla shares are a buy despite the “significantly overvalued” core electric vehicle business, analysts sayFrom Derek Saul