Elon Musk’s Tesla, Inc. TSLA is facing some bottlenecks as its adoption of global electric vehicles (EVs) has slowed since mid-2023, and bulk purchases of EVs in the United States still hinge on significant financial inducements. 

However, Tesla’s shares have picked up steam since the Nov. 5 election. Will this bullish trend persist into next year, making the stock an enticing buy? Let’s find out – 

Trump-Fueled Rally for the Tesla Stock

After breezing past the $1.2 trillion market capitalization threshold last week, the Tesla stock finished 0.2% higher at $389.79 on Monday. This is the highest closing level since Jan. 3, 2022, when the EV manufacturers’ shares ended at $399.93, per Dow Jones Market Data. 

The Tesla stock is trading at around 5% less than its record closing high of $409.97 per share on Nov. 4, 2021. Musk’s relationship with President-elect Donald Trump has lifted Tesla stock recently. 

At several events, Trump accompanied Musk, and it is widely expected that their bonhomie could help Musk tweak regulatory policies that could boost Tesla’s robotaxi development. Tesla will launch low-cost, autonomous robotaxi services in Texas and California in 2025. 

Deploying a fleet of driverless cars may lead to regulatory hurdles. However, connections with Trump can ease the process and help Tesla’s robotaxis compete with rival Waymo, Alphabet Inc’s GOOGL self-driving car, that gained fame after being launched in Los Angeles. 

Notably, Waymo has achieved an SAE classification of level four, while Tesla’s autonomous driving technology only reached level two. Worldwide, SAE International grades self-driving technology.

Trump’s support and the overall autonomous driving market are expected to aid Tesla’s self-driving cars and stock price in the long term.

Autonomous Driving Market to Grow – A Boon for Tesla Stock

Tesla has repeatedly said that its core business is selling cars that focus on self-driving technology. Autonomous cars are the next big thing as Tesla believes that crashes are less on autopilot than when a human is driving the car. 

The autonomous vehicle market is globally expected to expand from $158.31 billion in 2023 to $2,752.80 billion by 2033, at a CAGR of 33%, according to Precedence Research. Tesla, which is leading the autonomous vehicle market, is expected to benefit from this staggering growth, boosting its stock price.

Image Source: Precedence Research

Musk, Brokers Are Optimistic About Tesla’s Future

Musk predicts that Tesla stock will rise next year and become the most valuable company globally at some point as it aims to curtail the cost of its cars, increase market penetration, and offer full self-driving subscriptions.

Bank of America Corporation’s BAC analyst John Murphy is also hopeful about Tesla’s growth trajectory in the near term and has recently raised the price target from $350 to $400. Murphy is confident that Tesla’s revenues will improve in 2025 with the launch of affordable EV vehicles under $30,000, benefiting from present tax credits.

Murphy was impressed with Tesla’s full self-driving technology and expects the company’s investments in robotaxis to pay off, potentially helping it raise capital by selling shares.

Tesla Stock to Buy Hand Over Fist

Musk-Trump ties and autonomous driving growth, along with Elon Musk’s confidence, increase Tesla stock’s appeal for next year.

Tesla’s energy generation and storage business is thriving, driving faster profit growth than revenues, as shown in its third-quarter earnings report. As a result, the Zacks Consensus Estimate for its next-year earnings has moved up 7.2% over the past 60 days. 

Image Source: Zacks Investment Research

Moreover, the TSLA stock is currently trading above both the long-term 200-day moving average (DMA) and short-term 50-DMA, signaling a bullish trend, making it a wise investment option.

Image Source: Zacks Investment Research

Tesla stock, thus, rightfully has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

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