Tesla surges 13% as market sees Donald Trump's presidency benefiting key ally Elon Musk

• Tesla stock soared 13% on Wednesday to trade at its highest level in over two years.

• The surge comes as the market sees Elon Musk and his companies benefiting from a second Trump term.

• Musk was a vocal backer of Trump during the campaign.

Tesla investors are cheering the victory of Donald Trump over Kamala Harris on Wednesday, as Elon Musk and his companies could stand to benefit from a second Trump term.

Tesla stock soared as much as 13% and was trading at $283.19 at 11:20 a.m. on Wednesday, its highest level in over two years.

The surge comes as the market saw Tesla as a Trump trade in the weeks leading up to the election, with Musk a key ally during Trump's campaign. The CEO has said this election was just the beginning of his involvement in politics.

In a speech on Wednesday morning just before the race was called, Trump praised Musk to his supporters in West Palm Beach, Florida. He pointed to Musk's support in Pennsylvania, an essential swing state that Trump won.

"We have a new star, a star is born," Trump said. "Elon. He is an amazing guy."

Wall Street analysts seem to think Musk's rise as a key Trump backer will ultimately benefit Tesla.

CFRA Research senior analyst Garrett Nelson on Wednesday raised his price target on the stock from $265 to $375, implying over 33% upside from current prices.

"In our view, TSLA and CEO Elon Musk are perhaps the biggest winners from the election result, and we believe Trump's victory will help expedite regulatory approval of the company's autonomous driving technology," Nelson wrote in a Wednesday note.

The rest of the EV industry, though, is likely to suffer amid a likely rollback of EV rebates and tax incentives introduced by President Biden.

Investors fled other EV stocks on Wednesday, with shares of Rivian and Nikola dropping over 8% and almost 2%, respectively.

"We believe a Trump presidency would be an overall negative for the EV industry as likely the EV rebates/tax incentives get pulled, however for Tesla we see this as a huge positive," Wedbush Securities analyst Dan Ives wrote in a Wednesday note.

Read the original article on Business Insider