Tesla Shares Surge on Self-Driving Hopes, Musk's Political Stance
Tesla Inc. (TSLA) shares have experienced a significant surge in value since the company last reported earnings. This surge stems from high expectations surrounding upcoming results but is also fueled by Elon Musk's political prominence.
The company's massive market value has been bolstered by hopes that Tesla will lead the development and commercialization of fully self-driving vehicles. These expectations received a boost with Donald Trump's election victory, as investors anticipated a close relationship between Musk and the US President. This optimism largely ignores potential cash flow risks associated with a rollback of EV incentives.
Options market trading indicates investors are preparing for a significant move in Tesla's stock price following the release of its fourth-quarter earnings report. The predicted 7% fluctuation would be the smallest post-earnings movement since October 2022.
Despite a recent decline in share price, analysts remain optimistic about Tesla's potential. The stock's value has increased by nearly $600 billion since the previous quarterly report. However, some analysts argue that Tesla shares are more a reflection of speculation on Musk himself rather than the company's fundamentals.
Musk's recent comments questioning the financial capabilities of companies involved in the Stargate AI venture initiated by Trump have raised concerns about potential vulnerabilities for Tesla. The Republican party's generally anti-EV stance and Trump's consideration of eliminating EV subsidies could impact the company's revenue from selling regulatory credits to car manufacturers.
Despite these potential risks, some analysts believe that Tesla's core business may provide some protection from external shocks. The auto manufacturing industry has a longer cycle than software or hardware, which could delay any negative effects on Tesla.
Options market positioning indicates continued optimism ahead of the earnings report. Despite the potential for negative earnings numbers, Musk's ability to influence stock prices through public statements remains a factor.
In related news, ASML Holding NV experienced a significant surge in share price after reporting orders twice as high as analyst estimates. The company's chipmaking machines have seen increased demand due to the AI boom.
Other key tech stories include:
* Microsoft and OpenAI are investigating potential unauthorized data access by a group linked to DeepSeek.
* Apple has collaborated with SpaceX and T-Mobile to integrate Starlink support in its latest iPhone software.
* Hewlett Packard Enterprise met with Trump's antitrust enforcers regarding its planned acquisition of Juniper Networks.
* Sony Group appointed Hiroki Totoki as CEO, endorsing his efforts to expand the company's entertainment reach.
* Advantest Corp. raised its full-year forecast, citing increased AI spending and dismissing the impact of DeepSeek's recent announcement.
Wednesday's post-market earnings releases include prominent names such as Meta, Microsoft, Tesla, and IBM.