Dan Ives views a Trump White House as a significant advantage for this artificial intelligence (AI) firm.
Over the past couple of weeks, the financial markets have seen significant volatility due to the uncertain outcome of the presidential race between Vice President Kamala Harris and former President Donald Trump. However, with the election result now clear, investors are likely considering the potential changes an incoming Trump administration could bring.
In a recent interview with Yahoo! Finance, analyst Dan Ives from Wedbush Securities expressed optimism towards the technology sector. He specifically mentioned that Tesla (TSLA -0.90%) could see significant growth under a Trump administration.
Let's explore why tech stocks, particularly Tesla, could be beneficial under a Trump presidency.
Possibilities of a Trump administration for technology businesses
One of the key topics during Trump's campaign was the possibility of imposing tariffs on certain imported goods. Although this is still in its early stages, there's a good chance that any tariffs implemented would primarily affect overseas technology businesses.
Similar to the Biden-Harris administration's focus on bolstering U.S. semiconductor manufacturing and technology research, I believe the incoming Trump administration will continue to prioritize domestic technology and U.S.-based businesses.
Why Dan Ives is bullish on Tesla
Elon Musk, CEO of Tesla, became a significant influencer for the Trump campaign during the election period. However, even before his involvement with Trump's rallies and public support, Musk had been proposing the creation of a new government agency focused on enhancing efficiency through significant budget reductions.
In the clip below, Ives explains why Tesla could stand to gain significantly from the Trump administration.
"Autonomous technology will likely be fast-tracked in our opinion, which could be worth $1 trillion just in the AI aspect for Tesla," says Wedbush managing director @DivesTech about $TSLA. "For Musk, his support for Trump is a strategic move." pic.twitter.com/U3rMjisDSE
-- Yahoo Finance (@YahooFinance) November 8, 2024
As Ives aptly puts it, there's a good chance Musk becomes a "confidant in the White House." This could lead to quicker regulatory approval for Tesla's autonomous vehicle ambitions.
Musk's influence in the White House could potentially catapult Tesla into a new period of exponential growth. In addition to Ives, longtime Tesla supporter Cathie Wood of Ark Invest sees autonomous driving fleets as a trillion-dollar opportunity.
Is Tesla stock a buy right now?
After Musk's public appearance with Trump at a rally in Pennsylvania on Oct. 5, shares of Tesla have surged by 28% as of market close on Nov. 8. Post Election Day (Nov. 5), Tesla stock has risen by 33%.
This price action suggests that investors are beginning to factor in Musk's involvement with the Trump campaign, potentially leading to ideas about how both Musk and his companies could benefit from the incoming administration.
While I agree with Ives' points, I would encourage investors to consider the broader context. There's certainly a considerable amount of momentum driving Tesla stock as investor enthusiasm skyrockets. However, Tesla has experienced significant valuation expansion in a very short time frame.
In my opinion, this level of volatility in Tesla stock presents an opportunity for day trading. It's highly likely that a sell-off will occur sooner rather than later, leaving those who follow the day traders holding onto their positions.
In conclusion, although I don't advise buying Tesla stock at this exact moment, I remain optimistic about the company's prospects over the next four years under the Trump presidency. I share Ives' belief that Musk's relationship with Trump will yield some form of benefit, and I encourage investors to stay informed about any developments related to Tesla's autonomous driving initiatives, as progress made in this area could drive up the stock price.
Following the election result, investors are likely considering the potential changes an incoming Trump administration could bring to finance and investing, particularly in the technology sector. The analyst Dan Ives from Wedbush Securities has expressed optimism towards Tesla, suggesting that the company could see significant growth under a Trump presidency due to potential fast-tracking of autonomous technology and Musk's potential influence in the White House.
%20firm.){kind=link}