Wedbush Effects predicts Tesla Inc.‘s (NASDAQ:TSLA) artificial intelligence initiatives could yield big gains under the Trump presidency, despite potential headwinds for the broader electric vehicle industry.
What happened: Then Ivesa leading analyst at Wedbush Securities predicts that Donald TrumpTesla’s return to the White House could significantly boost Tesla’s AI ambitions, potentially allowing the electric vehicle maker to unlock “$1 trillion in incremental AI valuation” in the coming years.
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However, the outlook for the broader EV industry appears mixed. CEO of Tesla Elon Muskwho actively campaigned for Trump, has acknowledged that the new administration would likely eliminate EV subsidies and tax credits discussed during Tesla’s second-quarter earnings call.
“We believe Trump in the White House will change the landscape for Elon Musk and Tesla,” Ives said during an appearance on CNBC’s Squawk Street. The analyst characterized Musk’s partnership with Trump as a “major strategic gamble” that “could prove highly bullish for Tesla’s AI/autonomous story.”
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Why it mattersThe company predicts that Tesla’s shares could see a price increase of $40-$50 under Trump’s presidency, meaning a potential upside of 16% to 20% based on current trading levels. Analysts attribute this positive outlook to Tesla’s established market position and manufacturing capabilities.
“We believe that a Trump presidency would be overall negative for the EV industry as there is a good chance that EV rebates/tax credits could be withdrawn,” Wedbush analysts wrote on Tuesday. “For Tesla, however, we see this as a potential positive, with some caveats.”
In addition to Tesla, Ives also expects major AI initiatives that could benefit other major technology players Microsoft Corp., Amazon.com Inc., Alphabet Inc.‘S Googling, And Palantir Technologies Inc.
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The analysis comes as Trump prepares to take office as the 47th president of the United States, marking a period of potential transformation for both the technology and automotive sectors.
Price promotion: Tesla Inc. showed a standout performance on Wednesday, closing up 14.75% at $288.53, marking a significant one-day gain that brought year-to-date gains to 16.15%.
In contrast, key US-based EV competitors struggled significantly Rivian Automotive Inc. (NASDAQ:RIVN) and Nio Inc. (NYSE:NIO). Rivian fell 8.31% to $9.71, extending its challenging 2024 trajectory with a 53.98% decline since the start of the year. Nio fell 5.30% to $5.00, with a year-to-date decline of 40.62%.
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Chinese EV maker Xpeng Inc. (NYSE:XPEV) and leading Chinese hybrid-electric giant BYD company (OTC:BYDDY) also suffered losses, albeit to a lesser extent. Xpeng closed 3.98% lower at $12.30, while BYD fell 4.53% to $71.93, although BYD continues to perform strongly overall, up 33.95% year-to-date.
On the ETF side, Tesla’s momentum mirrored that of Simplify Volt RoboCar Disruption and Tech ETF (NYSE:VCAR), which rose 18.48% on Tuesday. However, the broader EV sector showed mixed results SPDR S&P Kensho Smart Mobility ETF (NYSE:HAIL) is up just 1.23%, according to data from Benzinga Pro.
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This article Trump White House Could Unlock Trillion-Dollar AI Potential for Tesla, Says Dan Ives originally appeared on Benzinga.com
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