Musk Trump Tesla Feud Narrative Twist Stock

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Analyst: Musk-Trump feud a major twist in Tesla’s stock market story

And for Tesla, narrative matters more than fundamentals.

6/6/25 9:54AM

Barclays’ Dan Levy is one of the few brave Wall Street analysts willing to wade into the Trump-Musk spectacle, publishing a note Friday with thoughts on how to make market sense of the remarkable public bust-up that wiped $150 billion or so from Tesla. Levy, who has an “equal weight” rating on the shares, writes:

“We believe the broader significance of the exchange is that it reflects a reversal of Tesla’s narrative, which had been at a high.
As a reminder, Tesla’s strength post election was largely off the excitement of Elon Musk’s connection with Donald Trump.
We’d argue that the move was likely overkill, but given the strength of the stock in the face of weak fundamentals, we are not fully shocked that an optical blow to the narrative drove a move like this...
We remain slightly negatively biased on the stock — it’s still possible that the Robotaxi launch underwhelms. And perhaps more importantly, we believe the stock hasn’t fully confronted weak fundamentals / challenged auto sales, which don’t seem to matter… until they eventually matter.”

For much of the last year, the ability of Tesla shares to shake off a long string of staggeringly bad news on its core automotive business left fundamentally minded analysts flummoxed. And in many ways, as Levy commented, the right comp for Tesla is bitcoin or some other crypto asset, which has no actual business and trades on market vibes.

That’s because markets are not just bloodless discounting machines constantly calculating the potential for profits over the next 12 to 18 months. They’re also a human institution. And when humans are involved, stories matter. This is even more the case for stocks with a large chunk of individual investors holding shares. About 30% of Tesla shares are thought to be owned by retail traders.

Over the last decade, no one has been more of a master manipulator of market narratives than Elon Musk, who’s combined his extremely online public profile and fantastical visions of the future with periods of actually impressive business performance. The result? A remarkably high — and more or less durable — market premium for the shares.

Then Musk went to DC. As a result of his immersion in right-wing politics and identification with Trump, the story surrounding Tesla has shifted, as Levy said, to one where Tesla’s strength is largely derived from Musk’s personal connection with Trump. It nearly doubled in value in the month after the election, making it a major Trump trade.

With that connection ruptured — perhaps permanently — die-hard Tesla bulls are in the market for a new narrative.

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J. Edward Moreno2h

Max Knoblauch3h

Rivian climbs as it rolls out a “universal hands-free” update and scores an upgrade from Baird

Shares of EV maker Rivian are on pace for their 10th best day of 2025 on Thursday, following an upgrade from Baird to “buy” from “hold” and the rollout of its new hands-free driving update.

Baird raised its price target on Rivian nearly 79% to $25, writing that “2026 is the year of R2.”

Meanwhile, Rivian says its new hands-free feature will allow drivers to take their hands off the wheel across 3.5 million miles of US and Canadian roads.

Despite referring to it as “universal hands-free” driving, the EV maker says the feature will not stop or slow for traffic lights or stop signs, follow navigation systems, or make turns, and will function only on roads with visible lane lines.

Rivian revealed the update at its AI Day last week, when it also hinted at a robotaxi plan.

Rivian rolls out new 'Universal Hands-Free' driving feature | TechCrunch

Meanwhile, Rivian says its new hands-free feature will allow drivers to take their hands off the wheel across 3.5 million miles of US and Canadian roads.

Rivian revealed the update at its AI Day last week, when it also hinted at a robotaxi plan.

Matt Phillips4h

The stock market loves your rising electricity bill

Utilities with a footprint in the massive PJM Interconnection, the country’s largest power grid, were up Thursday after prices set in a key auction hit a record high of $333.44 per megawatt-day.

Such power providers, including Talen Energy, Constellation Energy, and Vistra, saw tidy gains shortly before midday.

“This auction leaves no doubt that data centers’ demand for electricity continues to far outstrip new supply, and the solution will require concerted action involving PJM, its stakeholders, state and federal partners, and the data center industry itself,” Stu Bresler, set to become PJM’s chief operating officer next month, told Reuters.

As I’ve previously mused, political pushback from high power prices, partially created by the AI boom, could become a constraint on development of such sites. Democrats in the US Senate are now calling for hearings on the issue.

It’s fertile political soil. This morning’s US CPI report for November showed electricity prices up nearly 7% year over year, the highest since the tail end of the postpandemic inflation in April 2023.

Costs on Key US Grid Hit New Record, Testing Affordability

Luke Kawa5h

Micron’s earnings, soft inflation, and OpenAI valuation chatter revive speculative AI trade

The three biggest news events since markets closed yesterday are all helping spur a big bounce-back for the more speculative companies tied to AI:

Micron’s eye-popping Q2 guidance reaffirmed beyond a shadow of a doubt how hot AI demand continues to run in the near term.
While the data is undoubtedly messy, core CPI inflation decelerated by much more than anticipated in November. Lower rates are a clear positive for more marginal companies levered to the AI theme, whose stocks trade with a higher embedded risk of default and whose bonds have also been suggesting more credit risk as of late.
OpenAI reportedly getting its hands on more money (and commanding a higher valuation in the process) provides some semblance of valuation support for these firms and also a better fundamental foundation as well: more cash in CEO Sam Altman’s pockets means more cash he has to make good on commitments to OpenAI’s many suppliers.

Put together, the key news items since Wednesday’s close are producing massive gains for the likes of Bloom Energy, Cipher Mining, POET Technologies, CoreWeave, IREN, and Nebius.

Matt Phillips5h

GE Vernova upped to “buy” at Jefferies

GE Vernova is up early, enjoying the benefits of both a rebound in the AI data center trade and an upgrade to “buy” from analysts at Jefferies. In a note published on Thursday, they wrote:

“We upgrade to Buy. More positive on the outlook for Power (gas pricing & services visibility) and electrification yet shares are down since the December 9th Analyst Day. $815 PT up from $736. Gas turbine pricing continues to positively surprise and services provides visibility deeper into the 2030s, eventually offsetting gas equipment weakness.”

The target is slightly above the FactSet consensus price target of $753 on the stock, and implies a 23% premium to GE Vernova’s closing price on Wednesday. The stock is up almost 100% in 2025.