Tesla Stock Climbs Out Of A 2-Week Rut As Trump’s Inauguration Nears: Retail Keeps The Faith

Shares of Tesla Inc. surged nearly 5% on Friday, on course to break two consecutive weeks of losses, as optimism among retail and institutional investors improved just days ahead of President-elect Donald Trump’s second-term inauguration.

Tesla’s rally follows its robust 2024 performance, continuing momentum that began with Trump’s victory last November. 

Investors are increasingly bullish on Tesla CEO Elon Musk potentially playing a significant role in Trump’s administration, which they expect could lead to policy shifts favoring the company.

While Trump’s administration is expected to scale back EV tax credits introduced under Joe Biden, analysts and investors are optimistic about looser regulations for autonomous vehicles, aligning with Musk’s AI-driven vision for Tesla.

Morgan Stanley analyst Adam Jonas highlighted these dynamics in a note on Thursday, detailing insights from a quarterly bull-bear investor lunch.

Jonas mentioned investors were largely focused on tangible advancements in Tesla’s Full Self-Driving (FSD) technology, robotaxis and progress on the Optimus humanoid robot rather than the core auto segment.

He emphasized growing interest in Tesla’s role in intelligent robotics and manufacturing, calling it a potentially transformative driver of growth and shareholder value.

“A potential AI day including a more advanced (i.e., autonomous) demonstration of Optimus humanoid with 3rd generation hardware is getting heightened attention,” he wrote.

Jonas reiterated his ‘Overweight’ rating and a $430 price target for Tesla, citing its potential to fill the soon-to-come “critical gaps between the reliable… supply and demand” in “agentic” AI.

TSLA sentiment and message volume Jan 17 as of 1:20 pm ET | source: Stocktwits

On Stocktwits, Tesla’s sentiment meter remained ‘bullish’, with message volume soaring over 240% in the past week. 

Retail investors have pointed to recent technical indicators signaling further upside potential, with many expressing optimism about Tesla’s long-term prospects despite its current valuation challenges.

Tesla’s stock, trading nearly 30% above the average analyst price target, according to Koyfin data, carries a forward price-to-earnings (P/E) ratio of 140x and a trailing multiple of 119x. 

Despite these elevated valuations, investor enthusiasm remains anchored in Tesla’s leadership in next-generation technologies like AI, autonomous driving, and intelligent robotics.

However, challenges from rising competition in China and broader EV market dynamics will be critical to watch as the year unfolds. 

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