Good morning! Let’s see if the Dow turns green today — it’s on its worst losing streak since 2018.

Now, we covered last week how Elon Musk’s net worth has grown some $4 billion a day since Donald Trump won the election. This morning, we have an update from Wall Street about where Tesla stock could go in 2025.

Tesla could hit $650 a share

In business, there are rarely downsides to buddying-up with the guy in charge — especially if it means direct access to the White House. 

Whether by donating capital or spending time on the campaign trail, Elon Musk helped Donald Trump win the presidency on November 5. In six weeks since, Tesla and its shareholders have already benefited from Musk’s politicking. 

Wedbush’s Dan Ives expects plenty more dividends to come.

Ives, who has long been bullish on Tesla, just raised the firm’s 2025 price target from $400 to $515. The stock could rise to $650 in a bull-case scenario, he said. 

He believes Trump will be a “total game changer” for the electric-car maker. 

As is, the majority of Tesla’s 84% year-to-date gain has happened after election day.

“We estimate the AI and autonomous opportunity is worth at least $1 trillion alone for Tesla,” Ives said.

“[W]e fully expect under a Trump White House these key initiatives will now get fast tracked as the federal regulatory spiderweb that Musk & Co. have encountered over the past few years around FSD/autonomous clears significantly under a new Trump era.”

Based on Tesla’s record closing price of $459 on Monday, those estimates project Tesla could rise between 12% and 42%. 

By the end of 2025, Ives said Tesla could reach a $2 trillion market capitalization — and that forecast does not account for any potential upside for Tesla’s Optimus robots, he noted.

Currently, Tesla has a market cap of $1.44 trillion. At the end of 2023, it was worth about half that value, at $789 billion. 

Reuters reported Sunday the Trump transition team wants to repeal a requirement for companies to report automated vehicle crash data. Musk has previously voiced his opposition to the rule, as he’s claimed regulators unfairly target Tesla.  

It’s also possible, in Wedbush’s view, that in the event of China tariffs, the Trump administration creates carve-outs to shield Tesla from repercussions.

“We believe Tesla remains the most undervalued AI play in the market today,” Ives said.

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Elsewhere:

💰️SoftBank bets big on America. CEO Masayoshi Son spoke at an event with president-elect Donald Trump to pledge $100 billion of US investment, in addition to the creation of 100,000 jobs focused on AI. In Son’s words: “My confidence level to the economy of the United States has tremendously increased with [Trump’s] victory.” (WSJ)

📉Nvidia enters correction territory. The stock slipped more than 2% Monday, putting it about 12% below its closing high of $148.88 reached in November. That said, the chipmaker remains the de facto AI play, and its stock has skyrocketed 165% year-to-date. (CNBC)

📊 US economic activity is still humming. S&P Global’s flash US composite PMI, which measures services and manufacturing activity, climbed to 56.6 in December, above the expected 55.1. At least by that measure, the economy grew at the fastest pace in nearly three years. (Yahoo Finance)

Traders see 97% odds the Fed cuts rates 25 basis points on Wednesday, according to Kalshi, the biggest US prediction market:

Rapid-fire:

• Bitcoin surpassed $107,000 as analysts point to “relentless” ETF demand (Yahoo Finance)

• Bond traders are positioning for the Fed to cut rates Wednesday before scaling back on easing in 2025 (Reuters)

• Trump says he intends to fire federal employees who don’t return to work in person (Bloomberg)

• MicroStrategy announced it bought yet another 15,350 bitcoins for around $1.5 billion over the last week (Barron’s)

• Ripple launched a new dollar-backed stablecoin that begins trading Tuesday (CNBC)

• Canada’s finance minister unexpectedly resigned from Justin Trudeau’s cabinet due to differences of opinion on the incoming Trump administration (Bloomberg)

• Charter rates for ships carrying liquefied natural gas have dropped to a record low due to massive overproduction from the 2022 European energy crisis (FT)

• Starbucks tripled baristas’ parental paid leave to 18 weeks (Bloomberg)

Last thing:

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