Tesla (NASDAQ:TSLA) stock has delivered substantial gains for shareholders since Donald Trump’s re-election, soaring by 75%. Investor optimism is driven by expectations of looser regulations and, perhaps even more significantly, the benefits of having a good buddy in the White House.
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That said, sharp price jumps often raise concerns about potential overvaluation, sparking fears of a market correction. Is Tesla at risk of hitting a speed bump?
Not according to top investor On the Pulse, who predicts miles of open road ahead for the EV giant.
“Despite high valuation, TSLA’s forecasted 20–30% delivery growth and robust gross margins suggest continued stock momentum, supported by a pro-business Trump administration,” writes the investor, who ranks among the top 4% of TipRanks’ stock pros.
On the Pulse explains that a general movement towards deregulation under a Republican administration could clear the way for TSLA’s autonomous vehicle efforts. Moreover, the “close working relationship” between Musk and Trump will further smooth out any regulatory ruffles.
Somewhat ironically, the investor argues that abolishing EV tax credits could actually provide a competitive advantage for Tesla. On the Pulse points out that Tesla is the only company already manufacturing EVs at scale, making it better equipped than other carmakers to withstand the removal of this consumer incentive.
On the Pulse is also optimistic regarding Tesla’s delivery numbers, which are expected to increase between 20-30% in 2025. Its gross margins, which grew to 19.8% in Q3 2024, are better than every other U.S. auto manufacturer, adds the investor.
“If Tesla sees stronger delivery growth in 2025, as the company has forecasted, and maintains gross margins of 20% or higher, I think that Tesla’s stock has the fundamental backing to keep soaring in 2025 as well,” On the Pulse asserts.
Concluding that the TSLA rally has yet to run its course, the investor rates Tesla shares as a Buy. (To watch On the Pulse’s track record, click here)
Wall Street is not quite as enthusiastic as the investor. With 13 Buy, 12 Hold, and 9 Sell recommendations, TSLA has a lukewarm Hold (i.e. Neutral) consensus rating. Its 12-month average price target of $287.10 translates into losses of ~35%. (See TSLA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
