Tesla (TSLA +2.96%) stock saw significant gains Friday thanks to multiple catalysts. The company's share price closed out the daily session up 3.1% and had been up as much as 6.3% earlier in trading. The gains took place in conjunction with a 1% gain for the S&P 500 index and a 1.5% gain for the Nasdaq Composite index.
NASDAQ: TSLA
Key Data Points
Tesla's valuation climbed today alongside reports that CEO Elon Musk could be involved in a deal to purchase TikTok from ByteDance -- its Chinese parent company. The electric vehicle (EV) leader's stock also appears to be getting a boost related to the inauguration of President-elect Trump this coming Monday.
Tesla stock jumps on TikTok stories
Due to data-security concerns and other issues connected to relations with China, U.S. regulators are moving to stop TikTok's operations within the country unless ByteDance cuts its connections to the social-media platform. Speculation is emerging about who might end up purchasing the leading short-form video service, and Elon Musk has reportedly emerged as a leading candidate.
In a recently published note, Wedbush analyst Daniel Ives said the firm believes that China and ByteDance are potentially open to selling TikTok to Musk or the X social media company he owns and leads. While TikTok being purchased by Musk or X wouldn't create any immediate catalysts for Tesla's core business operations, investors appear to be excited by the move -- and it's possible that expanding influence for the CEO could create some less tangible valuation benefits down the lines.
What comes next for Tesla under the new Trump administration?
In addition to the TikTok-related news, Tesla stock also got a boost today in conjunction with "Trump trade" momentum. Some investors have been building positions in companies that could see benefits related to the change in presidential administration. Elon Musk's relationship with Trump and leadership position in the "Department of Government Efficiency" advisory panel has helped make Tesla one of the high-profile valuation beneficiaries of this dynamic.
But while it's possible that Trump's inauguration on Jan. 20 and new presidential term could spur some short-term and long-term catalysts for Tesla stock, investors should continue to make business fundamentals central to any investment in the company. Tesla's share price is up 94% over the last year. On the other hand, the company's vehicle deliveries report at the beginning of this month showed that annual sales had dropped for the first time in the EV specialist's history.
Tesla's business has multiple growth avenues outside of traditional vehicle sales, but the stock's impressive run over the last year means some strong future growth is already priced into the company's valuation.
