These Artificial Intelligence (AI) Stocks Have Soared Since Trump Won the Election, but Should You Buy?
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Donald Trump's election has shaken up financial markets in a way that few elections have. Stocks soared broadly on his victory with financials and energy stocks leading the way, while some sectors fell, including real estate, which is sensitive to interest rates, and consumer staples, which could get hit by tariffs.
Bond yields initially jumped, a sign that bond investors anticipated interest rates would stay elevated due to tax cuts and other economic stimulus, as well as the impact of tariffs and larger deficits.
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Among the winners have been tech stocks, which tend to be cyclical and are expected to benefit from a more lax regulatory framework under the Trump administration. Through Nov. 14, the Nasdaq-100, which is heavily weighted toward the "Magnificent Seven," is up 3.3%.
Trump's approach to policies around AI isn't entirely clear, but some individual AI stocks have soared since he won the election. Let's take a look at a few of them.
1. Tesla
No AI stock has gotten more attention than Tesla (NASDAQ: TSLA) since Trump's election, and it's easy to see why. CEO Elon Musk fully embraced Donald Trump's campaign, and now he seems set to reap some kind of benefit, having the president's ear to bend when he wants.
Investors clearly seem to think that Trump's victory will favor Tesla. The EV stock has jumped 24% since the election, as of Nov. 14, and was up more than 40% at one point. Wall Street is optimistic that the Trump administration will make it easier for Tesla to roll out its robotaxis, or Cybercabs, and the administration could federalize laws regarding the oversight of autonomous vehicles as much of the regulatory apparatus happens at the state level. There are also currently federal restrictions that prohibit companies from deploying more than 2,500 driverless vehicles per year, which would prevent Tesla from a rapid rollout of the newly introduced Cybercab.
However, there are also risks to Tesla that didn't exist a few months ago. The Trump administration is planning to eliminate the $7,500 EV tax credit, which is likely to shift some EV sales to gas-powered cars. Musk downplayed the impact of that move, but he's complained in the past about the impact of high rates on Tesla's sales, showing that Tesla's vehicles are price-sensitive and they're competing with gas-powered cars.
Additionally, Musk's alignment with Trump could also turn off some potential Tesla buyers as Musk's own brand is now closely tied to Trump.