Retail investors seem to have spotted an opportunity in the sudden feud between U.S. President Donald Trump and his former ally, Tesla CEO Elon Musk, scooping up shares of the electric car maker as they tumbled on the acrimonious standoff.
The rift between President Donald Trump and Tesla chief Elon Musk has captivated the world as a political drama, but it has also become a Wall Street spectacle, highlighting the risk to equity markets from the world's biggest stocks.
Tesla Inc (NASDAQ:TSLA) shares surged more than 5.5% on Friday as investors welcomed signs of a possible détente between CEO Elon Musk and President Donald Trump following a volatile day of public sparring that had raised concerns over future regulatory risks. Wedbush analyst Dan Ives acknowledged the drama surrounding the pair's recent falling-out, calling it “one of the strangest Twilight Zone days we have seen” in years of covering Musk, but stressed the market reaction had gone too far.
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This disagreement “could potentially (temporarily) alienate multiple sides of the political spectrum," warned Morgan Stanley analyst Adam Jonas in a Friday note.
President Donald Trump is mulling selling or giving away a Tesla he bought in March. Trump and Elon Musk fell out on Thursday after the Tesla CEO harshly criticized a major tax bill the president wants Congress to pass.
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Donald Trump has said Elon Musk has "lost his mind", according to US media, as the White House reveals the president is not interested in speaking to him.
Investors were hopeful for signs that the two might reconcile after Tesla suffered its worst single-day drop in more than four years, though President Trump said Friday he has no interest in a call with CEO Elon Musk.
Tesla, Inc. CEO Elon Musk's recent actions have eroded the political goodwill Tesla may have been betting on, impacting the stock's outlook. On June 5th, a public spat on Musk's X platform between Musk and President Trump left investors scratching their heads. The anticipated catalyst for further TSLA gains has dissipated for now, raising concerns about near-term upside potential.
Tesla's fundamentals remain strong despite political drama; the recent dip is a buying opportunity for long-term investors. CEO Elon Musk's pivot away from President Trump could realign Tesla's brand with its original, liberal-leaning customer base, providing a positive catalyst. Political risks, including potential subsidy removal, are likely already priced in; product quality and innovation will drive long-term value.