Analyst explains what likely Trump win means for Big Tech, AI and Tesla

Investing.com -- Wedbush analysts expect a strong bullish reaction from tech stocks to a likely victory for Donald Trump in the US presidential election, especially in case of a “red sweep” in Congress.

The investment bank believes that a Trump administration would prioritize AI initiatives in the US, benefiting major tech companies like Microsoft (NASDAQ:MSFT ), Amazon (NASDAQ:AMZN ), and Google (NASDAQ:GOOGL ). These initiatives, especially within government agencies like the Department of Defense, could also provide a major boost to AI-focused firms such as Palantir (NYSE:PLTR ).

Although the Inflation Reduction Act (IRA) might undergo major revisions negatively impacting companies like Intel (NASDAQ:INTC ), the emphasis on AI is expected to be “front and center in our view and benefit Big Tech,” analysts led by Dan Ives wrote.

Another potential advantage for Big Tech under a Trump presidency could be the departure of Lina Khan from the Federal Trade Commission (FTC). Khan has been a significant challenge for the sector, scrutinizing and challenging tech deals.

The market perceives her potential exit as a catalyst for increased deal flow within the industry. The influence of Elon Musk, a Trump supporter, might also hasten Khan's departure, thereby removing a substantial obstacle for tech companies.

“While anti-trust issues remain with the DOJ vs. Google as well as Apple (NASDAQ:AAPL ), Khan potentially out at the FTC would be a huge positive for Big Tech,” analysts noted.

But the biggest beneficiaries of a Trump win will be Tesla (NASDAQ:TSLA ) and Musk, according to Wedbush. Although the broader electric vehicle (EV) industry could suffer from the elimination of EV rebates and tax incentives, Tesla's unmatched scale and scope could provide it with a distinct competitive edge in a non-subsidized market.

Furthermore, Trump's presidency could continue to impose higher tariffs on China, deterring Chinese EV manufacturers from entering the U.S. market and further solidifying Tesla's position.

The former president’s victory might also accelerate Tesla's Full Self-Driving (FSD) and autonomous initiatives, along with those of other players like Waymo.

“The autonomous fast tracking will be front and center for investors in this scenario as some of the 2026/2027 goals for Tesla could be accelerated to stay on track with the China timeline for autonomous currently underway,” analysts explained.

“We believe a Trump win could add $40-$50 per share to Tesla's stock if autonomous/FSD is accelerated starting in 2025 and a tailwind for Cybercab,” they added.

Tesla shares rose around 3% in premarket trading Wednesday as investors reacted to NBC News’ count that Trump had gained a significant lead over Harris in Electoral College votes.

Musk contributed close to $75 million last month to America PAC, a super political action committee he founded earlier this year to back the Republican nominee.

Trump has pledged to appoint Musk as the head of a government efficiency commission if he wins the election.

Source: Investing.com