Tesla Share Price Prediction: Market Cap Crosses $1 Trillion. Hype or Value?
In summary, Tesla's stock price exceeded $340 in early trading on Monday. However, with a 31 percent increase over the past week, it raises important questions that need to be addressed.
Tesla's stock surged significantly in the pre-market trading on Monday, climbing to $343, which is the highest it has been since April 2022. At that moment, the share price had increased by 7 percent compared to its closing value on Friday, suggesting a promising week ahead. Over the last five trading days, Tesla's shares have risen by 31 percent, boosting its overall worth by more than $200 billion and bringing its market capitalization up to $1.1 trillion.
Tesla's recent surge in stock prices is largely linked to Donald Trump's victory in the US election last week, as well as the significant involvement of CEO Elon Musk in his campaign. This rise isn't necessarily indicative of the company's actual track record but rather stems from optimistic expectations for Trump's time in office. Additionally, Tesla's latest quarterly earnings surpassed projections, and Musk shared a positive outlook for the upcoming year.
Musk's position in the new administration isn't clear yet, but Trump seems open to bringing him in. Still, it's doubtful Musk would accept a government role that would force him to give up some of his business responsibilities. What's clear is that the new administration is expected to speed up the regulations related to self-driving cars.
Quicker approvals won't just help Tesla's cyber taxi and cyber van, but will also aid competitors like Waymo, a subsidiary of Alphabet, and Ford's Cruise. It's worth mentioning that both Waymo and Cruise have been experiencing losses since their inception, largely because they aren't yet operating on a commercial level.
Additionally, shares of Alphabet and Ford have increased by 5% and 7.2% over the past five trading days, which is significantly lower than the nearly 25% rise seen in Tesla's stock (NASDAQ: TSLA) during the same time frame. This suggests that Tesla's recent price surge may be more influenced by speculation than by its actual worth. If this is true, a market correction could be on the horizon.
Tesla Stock Price Forecast
The Tesla stock is currently hovering around $341. If buyers can maintain the price above this point, we might see further gains, with the first resistance level expected at $346. Should the upward momentum continue, the price could rise even more to reach $435.
On the other hand, if the price drops below $341, sellers will likely take charge. This could set the initial support level at $338. Yet, if the downward pressure continues, it might fall below this point, which would undermine any bullish outlook. In that case, the price could drop further and possibly reach $334.
