Tesla Inc.’s stock went up 1.8% on Friday after Wedbush analyst Dan Ives released his latest bullish note on the electric vehicle maker. In it, Ives said that the company will eventually be able to make $1 trillion from AI and self-driving cars.
Trump’s relationship with Elon Musk as CEO of Tesla and his “significant influence” in Trump’s White House are already having a big effect on Tesla TSLA 3.69%, Ives wrote in a note to clients.
As Trump gets ready to take a hard line on AI and self-driving cars, the next step is for the U.S. Transportation Department to make a formal federal framework for fully self-driving cars a top goal.
He wrote, “This would be a huge step towards loosening U.S. rules on self-driving cars and be a big boost for Tesla’s autonomous and AI vision going into 2025.”
According to Wedbush, Tesla’s stock should “outperform,” and the firm wants the price to reach $400, which is the highest on Wall Street. (Global Equities study is another study group that thinks Tesla should be worth $400.)
As reported by Axios this week, another plan put forward by the Trump administration is to create a “AI Czar.” Ives said that this would help drive key tech projects that would benefit Tesla.
“We think the AI and autonomous opportunity is worth $1 trillion for Tesla alone, and we fully expect that these key initiatives will now get fast tracked under a Trump White House. This is because the federal regulatory web that Musk and Co. have been caught in over the past few years around FSD and autonomous will clear up a lot under a Trump administration,” the analyst wrote.
The market value of Tesla is just over $1 trillion right now. Ives said that the next $1 trillion will start to come in over the next 12 to 18 months.
Tesla has always been more than just a car company. The note said, “and the first part of this grand strategic vision has taken shape over the past five years.” Still, the company is the most underrated AI play on the market. Trump can help it do well, though.
If the EV tax credits are taken away as planned, Trump’s leadership will probably be bad for the EV space as a whole. Ives said, “But it will be good for Tesla.”
“Tesla has the scale and scope that is unmatched in the EV industry,” he wrote. “This will give Musk and Tesla a clear competitive advantage in a world without EV subsidies starting in 2025.”
So far this year, Tesla stock has gone up 36%, while the S&P 500 has gone up 26%.
