Tesla (TSLA +2.96%) stock has seemingly gone straight up since the U.S. election. That more than 80% rise has brought it to new all-time highs. Shares jumped another 5.6% today as of 3:25 p.m. ET. And one Wall Street analyst thinks there are good reasons for the recent parabolic move.
NASDAQ: TSLA
Key Data Points
Wedbush analyst Dan Ives just released a report in which he raised his price target on the stock by $115 per share. His new target is $515, the highest price target for Tesla on Wall Street. Ives sees the recent run in the stock as being logical based on new circumstances brought by the election of Donald Trump.
All about self-driving tech
Tesla CEO Elon Musk supported Trump monetarily and vociferously before the election. He's now become one of Trump's advisors with a place in the incoming administration. Ives wrote that Musk's new position is a "total game changer for the autonomous and AI [artificial intelligence] story for Tesla and Musk over the coming years."
Many Tesla observers, including Elon Musk, believe that Tesla should be valued more on the potential future income from its self-driving technology than its existing car sales. Ives believes that a new Trump administration will open the door for that technology to quickly gain traction.
Ives doesn't think Tesla stock will stop at $515 per share, either. He believes the self-driving technology -- known as full self-driving, or FSD -- can drive Tesla's valuation to over $2 trillion in the next 12 to 18 months. That would imply a stock price of about $625 per share by the middle of 2026. That's another 35% gain from recent prices.
Musk has said that investors shouldn't own Tesla stock if they don't feel it will solve issues associated with autonomous driving. The company has made strides sending out new updates that still require driver supervision.
The timing could be right for Tesla's technology to hit the streets with the advanced versions and a friendly administration in the White House. That has investors buying into what Ives published today.
