Trump Stock – Will a Trump Defeat Affect Musk’s SpaceX and Tesla? Financial Experts Weigh In

Trump Stock – Elon Musk, the CEO of Tesla and SpaceX, has made his support for former President Donald Trump clear in the run-up to the 2024 election. Musk has backed Trump’s campaign financially, committing more than $100 million to help get the Republican candidate re-elected. Trump, in turn, has praised Musk, even suggesting he might appoint Musk as his “Secretary of Cost-Cutting” if he wins, though Musk would not be part of the Cabinet.

But what happens to Musk’s businesses if Trump loses and does not return to the Oval Office? Could a Trump loss have long-term effects on Tesla and SpaceX, or will these companies continue to thrive regardless of the election outcome?

Short-Term Effects on Musk’s Companies: A Mixed Bag

In the short term, stock movements often reflect the emotions and momentum of the election cycle, but these effects usually do not have lasting impact. According to Kevin Thompson, a finance expert and CEO of 9i Capital Group, a Trump loss could cause a temporary dip in the stock prices of Musk’s companies. However, Thompson points out that it is unlikely to affect the long-term outlook of either Tesla or SpaceX.

“A Trump loss might lead to a dip in Musk’s stocks, but it’s unlikely to affect Tesla and SpaceX’s longer-term outlook,” Thompson told Newsweek. As the election results unfold, emotions might drive some short-term shifts in the market, but long-term investors tend to focus on the company’s fundamentals rather than political affiliations.

Potential Gains If Trump Wins: Greater Influence for Musk’s Companies

On the other hand, a Trump victory could bring immediate advantages for Musk and his businesses. Alex Beene, a financial literacy instructor at the University of Tennessee, explains that if Trump wins, Musk’s close ties to the administration could allow him to influence policy proposals that align with the interests of Tesla and SpaceX.

“A Trump victory is not going to just equate to Elon Musk having strong ties to the White House, but also the ability to influence policy proposals that will undoubtedly favor his companies and their missions. Investors will recognize this, and the bump shares could see could be significant,” Beene said.

If Trump becomes president and Musk plays a role in shaping economic policy, there could be major shifts to the federal budget. Musk has previously suggested that he would aim to cut $2 trillion from the federal budget if appointed as an advisor to Trump, which would undoubtedly have far-reaching implications for government spending.

Trump’s Policies vs. Musk’s Vision: A Complicated Relationship

Despite the potential for short-term gains under a Trump administration, some financial experts argue that Trump’s policies may not align perfectly with Musk’s long-term vision, especially when it comes to energy. Thompson points out that Trump’s policies generally favor traditional energy sources over electrification, which is in direct contrast to Musk’s goal of advancing electric vehicles and renewable energy solutions.

“Trump’s policies generally favor traditional energy sources over electrification, which doesn’t align with Musk’s vision,” Thompson said. “Regardless of the outcome, we’re likely to see some volatility, as traders shift positions and adjust to new economic policies.”

However, Beene notes that a Democratic administration traditionally offers advantages for electric vehicle manufacturers, which could benefit Tesla in particular. Under Democratic leadership, there are often incentives for electric vehicles that help stimulate growth in the sector. If Trump loses, Musk could find himself in a position where he has to reconsider his alignment with the Republican party.

Government Contracts: SpaceX and Tesla’s Stronghold

Both SpaceX and Tesla have benefited from government contracts, which could be impacted by the outcome of the election. SpaceX, for example, has received over $15.4 billion in government contracts over the past decade, including a $1.8 billion classified contract in 2021, according to The New York Times.

Meanwhile, Tesla has received approximately $350,000 in government contracts, though this figure is significantly lower. The nature of these contracts, especially for SpaceX, suggests that government ties will continue to play a significant role in the growth and success of Musk’s businesses, regardless of who holds the presidency.

If Trump loses, Musk may face challenges in securing future government contracts, particularly if a Kamala Harris administration or another Democratic government takes office. Beene speculates that a shift in leadership could lead to changes in how the government views electric vehicles and space exploration under a Democratic administration.

“A Trump loss would call into question how beneficial [a Kamala] Harris administration would be for Musk’s businesses,” Beene said. “Historically, Democratic leadership at the state and national levels have favored incentives for electric vehicles, but Musk’s decision to align with Trump could make them reconsider their prior decisions.”

A Risky Bet on Trump’s Re-election

While there may be some immediate gains for Tesla and SpaceX if Trump wins, Elon Musk faces the potential for volatility and risk in the long term. Whether or not Trump wins, his policies could affect Musk’s companies in complex ways.

Should Trump lose, Musk might see a temporary dip in stock value, but both Tesla and SpaceX are likely to continue thriving thanks to their strong market positions and the ongoing demand for electric vehicles and space exploration. However, if Trump does win, Musk could find himself in a position of great influence, shaping economic policies that could directly benefit his companies. In the end, investors will continue to monitor how Musk’s political affiliations and actions play out in the market, with both opportunities and risks on the horizon.