Tesla stock price jumps as Musk’s ‘bet of the ages’ on Trump pays off

Shares jumped 8% to $346.81, bringing the electric carmaker’s market cap to $1.1 trillion, and Wedbush analyst Dan Ives believes it’s just the start of a rally that will eventually send the valuation to $2 trillion.

That’s after CEO Elon Musk contributed more than $100 million to help elect Trump and became a top adviser to his inner circle.

“Musk’s considerable influence in the Trump White House is already having a big impact, and ultimately the golden path for Tesla around Cybercabs and autonomous is now within reach with an emboldened Trump/Musk strategic alliance playing out in real time and very much in line with our thesis,” he wrote in a memo on Sunday.

Trump clears the legislative “cobweb”

His thesis estimates that autonomous driving alone represents a $1 trillion opportunity for Tesla as the federal government under Trump clears the regulatory “cobweb” that has weighed down Musk’s vision for self-driving cars.

Trump’s transition team did not immediately respond Fortunes request for comment.

Musk has been teasing autonomous capabilities in Tesla vehicles for years. In 2019, the company prepared an entire wheelchair park and predicted that there would be over a million robotic axes on the road by 2020.

It didn’t happen. But last month he unveiled the Cybercab, a self-driving EV with no steering wheel or pedals that he said would carry a $30,000 price tag. Musk speculated it could be available “before 2027,” though he admitted he tends to be optimistic about timelines.

While weighing Tesla’s prospects under Trump, Ives maintained his outperform rating and $400 price target on the stock.

He added that the path to a $1.5 trillion valuation and then a $2 trillion valuation will unfold over the next 12 to 18 months, with Cybercab representing “the golden goose.” So far, he believes Tesla is the most undervalued AI play in the stock market today.

“Essentially, Musk made a strategic and large bet on a Trump White House win that will be known as a ‘bet of the ages’ for TSLA bulls as Tesla and Musk now stand to reap the benefits of a new friendlier ring road regulatory era ahead,” Ives wrote.

“The autonomous fast-tracking will be front and center for investors, as many of the 2026/2027 targets for Tesla could be accelerated to stay on track with China’s autonomous timeline currently underway.”