TSLA is now up almost 50% since the election day as the bullish momentum in the stock exploded following Trump’s victory. This shouldn’t be surprising given that Elon Musk bet big on Trump and the market is now rewarding it.
It looks like the US economy continues not only to do well but also re-accelerating amid the Fed’s easing and the expectations of expansionary fiscal policies like tax cuts and deregulation. Moreover, the manufacturing cycle might be in the early innings of a growth phase, so those are all positive macro factors for the stock.
Tesla, like Bitcoin, Dogecoin and so on have been the top beneficiaries of Trump’s victory given their direct connection to Trump. For now, there’s no real top in sight as we would likely need a contractionary monetary policy or a notable slowdown in the economy to turn things around.
The risk going forward is the Fed. If the central bank starts to mention the need of more tightening, then we could see some big corrections in all risk assets.
