Tesla (NASDAQ: TSLA) stocks posted significant gains on Friday thanks to multiple catalysts. The company’s share price closed the daily session with an increase of 3.1%, and earlier in the trading session it increased by as much as 6.3%. Gains occurred along with a 1% gain for S&P 500 index and an increase of 1.5% for Nasdaq Composite index.
Tesla’s stock rose today amid reports that CEO Elon Musk could be involved in a buyout TikTok from ByteDance — its Chinese parent company. Shares of the electric vehicle (EV) leader also appear to be getting a boost with President-elect Trump’s inauguration coming up on Monday.
Due to data security concerns and other issues related to relations with China, US regulators intend to halt TikTok’s domestic operations unless ByteDance cuts its ties with the social media platform. Speculation is rife about who might end up buying the leading short-form video service, with Elon Musk reportedly emerging as a leading contender.
In a recent note, Wedbush analyst Daniel Ives said the company believes China and ByteDance are potentially open to selling TikTok to Musk or the X social media company he owns and runs. While Musk’s or X’s acquisition of TikTok wouldn’t create any immediate catalysts for Tesla’s core business operations, investors seem excited about the move — and it’s possible that expanded influence for the CEO could create some less tangible valuation benefits down the line .
Along with the TikTok news, Tesla stock also got a boost today on the “Trump trade” momentum. Some investors have been building positions in companies that could see benefits associated with a change in presidential administration. Elon Musk’s relationship with Trump and leadership position on the advisory board of the “Ministry of Government Efficiency” have helped make Tesla one of the high-profile beneficiaries of this dynamic’s valuation.
But while it’s possible that Trump’s Jan. 20 inauguration and new presidency could spark some near- and long-term catalysts for Tesla stock, investors should continue to make the business’s fundamentals central to any investment in the company. Tesla’s share price has increased by 94% compared to last year. On the other hand, the company’s report on vehicle deliveries earlier this month showed that annual sales fell for the first time in the electric vehicle specialist’s history.
