Tesla's Share Price Continuously Climbs Higher
Tesla's Share Price Continuously Climbs Higher
Tesla (TSLA decreasing by 3.46%) witnessed a relentless acceleration in its stock as markets kicked off their operations once more on Monday. Up until 12:20 p.m. ET, the pioneer in electric vehicles had recorded a whopping 7.3% increase, pushing its overall gains since Donald Trump's reelection (with Elon Musk's endorsement) to a jaw-dropping 37%.
Remarkably, Tesla has regained its trillion-dollar status, amounting to an exact $1.1 trillion.
Factors propelling the rise in Tesla stock
A substantial proportion of today's gains can be attributed to an intensifying interest in Tesla stocks among Wall Street investors. More specifically, investors appear to be responding positively to a revised price target upgrade issued by investment bank Wedbush. As per reports, Wedbush analyst Daniel Ives recently elevated his price target on Tesla stocks to a staggering $400, which represents a sizable jump of 33%.
"Donald Trump's White House victory will serve as a catalyst for the autonomous and AI narrative for Tesla and Musk over the subsequent years," emphasizes Ives. Beyond merely acknowledging Musk's financial support in his election win, the analyst anticipates that a new Trump administration will dismantle the "regulatory web" that has hampered advancements in the realm of artificial intelligence and self-driving vehicles alike.
While it might be challenging to quantify the exact impact this could have on Tesla, Musk has strategically positioned the company to capitalize on these technologies. If the Trump administration works towards expediting these developments, Tesla would undoubtedly be a prime beneficiary.
Should one invest in Tesla stock?
While the allure of substantial numbers like $1 trillion might entice momentum traders into purchasing Tesla stocks, prudent investors should not disregard the actual figures. After its recent surge, Tesla stocks now carry an alarmingly high valuation of 88 times its trailing earnings, and 322 times its free cash flow. To justify such multiples, Tesla would need to exhibit an impressive growth rate, which some analysts believe may only have a four-year window before regulations change again. Do you feel prepared to gamble on such substantial growth within a short time frame? I, however, am skeptical.
In light of the positive responses to Wedbush's revised price target upgrade for Tesla stocks, many Wall Street investors are increasing their investments in the company. With a new price target of $400, this represents a significant increase of 33%.
Given Tesla's current valuation of 88 times its trailing earnings and 322 times its free cash flow, prudent investors should consider whether they are prepared to gamble on substantial growth within a short time frame, especially considering the potential changes in future regulatory environments.