By Tesla’s stock surge propelled its shares to a new 52-week high, significantly boosting Elon Musk’s net worth.
The remarkable climb added over $14 billion to his already substantial fortune, solidifying the billionaire’s position as the world’s wealthiest individual.
This surge comes amidst a wave of optimism surrounding Tesla’s future, which was fueled by positive analyst predictions and the potential for regulatory relief under a potential Trump administration.
A bullish market for Tesla
By midday EST on Thursday, Tesla shares had increased by over 3.6%, exceeding $370.
This followed a 1.8% increase on Wednesday, culminating in a brief peak of $375.43—its highest point since January 5, 2022.
This impressive rally translates to a significant increase in Musk’s Tesla holdings, which rose from $251.2 billion on Tuesday to $265.5 billion on Thursday.
This extends his lead over Amazon founder Jeff Bezos, who is the world’s second-richest person, to over $110 billion.
Analyst optimism fuels the rally
The recent rally, including a near 3.5% jump on Monday, is largely attributed to positive analyst sentiment.
Stifel, an investment firm, significantly raised its price target for Tesla to $411, surpassing all other Wall Street analyst predictions tracked by FactSet.
This bullish outlook reflects a growing confidence in Tesla’s future prospects.
Further bolstering the positive sentiment, BofA Securities analysts, fresh from a visit to Tesla’s Giga Austin factory, issued a bullish report.
Lead analyst John Murphy, in a note to investors, stated, “The trip gave us increased confidence that TSLA is well-positioned to grow in 2025+ with its core EV business and launch of its robotaxi offering, and longer-term from its investments in Optimus.”
Murphy reiterated his “Buy” rating and increased his price target to $400 from $350.
This positive assessment immediately impacted Tesla’s stock price, causing a 3% midday jump.
Tesla’s ambitious future
BofA’s optimism is rooted in several key factors.
Firstly, the anticipation of a low-cost electric vehicle, slated for release in the first half of 2025, is expected to significantly expand Tesla’s total addressable market (TAM).
Murphy projects this vehicle will cost less than $30,000, achieving cost reductions through “de-contenting, making the motor more efficient and thereby enabling a smaller battery, and changing the interior.”
He also anticipates additional new models in 2025.
Secondly, BofA is highly positive on Tesla’s Full Self-Driving (FSD) software.
Murphy’s team experienced the system firsthand, reporting, “The Cybertruck and Model Y we rode in … drove seamlessly to a charging station several miles away despite abnormal road conditions, traveling on roads under construction and taking a tough left turn against traffic.”
This successful test run suggests a potential near-term launch of Tesla’s robotaxi service.
Finally, Tesla’s humanoid robot, Optimus, is another factor contributing to the bullish sentiment.
Murphy noted that Optimus is already being used at Tesla’s Gigafactory to sort battery cells without human intervention and is undergoing dexterity tests, such as catching tennis balls.
Tesla aims to deploy 1,000 Optimus robots at Giga Austin by the end of 2025, and Murphy anticipates accelerated robot training as Tesla’s robotaxi technology matures.
While Musk has projected an enormous TAM of $200 trillion for Optimus, Murphy views it as a long-term potential opportunity with cost reductions and increased production expected from 2026 onwards.
He suggests that a capital raise through an equity offering could easily facilitate the necessary expansion of compute capacity for Optimus development.
Beyond the vehicles: Bitcoin, politics, and DOGE
The positive momentum is also fueled by Tesla’s association with Bitcoin and the cryptocurrency market.
The recent surge in Bitcoin’s price, surpassing $100,000 for the first time, is partly attributed to the selection of crypto-friendly SEC chair Paul Atkins.
Furthermore, Musk’s involvement in political circles, including a planned meeting with fellow Republicans on Capitol Hill to promote the Department of Government Efficiency (DOGE) committee, adds another layer to the overall positive sentiment surrounding Tesla and its CEO.
Tesla stock has seen a significant rise of almost 53% since Donald Trump’s election victory.
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