Hedge funds cut NFLX, keep big bets on MSFT, AMZN, add NVDA
Investing.com -- The feud between U.S. President Donald Trump and Tesla (NASDAQ:TSLA) CEO Elon Musk has resurfaced, with sharp public barbs raising concerns for investors.
Trump, posting on Truth Social, accused Musk of benefiting excessively from government aid, stating that Tesla CEO "may get more subsidy than any human being in history, by far" and suggesting that without it, “Elon would probably have to close up shop and head back to South Africa.”
Trump also urged a deeper review of Tesla and SpaceX’s funding, warning there’s “BIG MONEY TO BE SAVED!!!”
The renewed tension comes as Musk has openly criticized Trump’s proposed budget bill and the broader legislative process, a move that has sparked fresh worries over potential regulatory pushback.
According to Wedbush analyst Dan Ives, this escalating political spat remains an overhang on Tesla’s stock.
“We would expect the stock to be weak to kick off trading this morning as the Street will show concern that the Trump and Musk once BFF relationship now backfires and turns into a junior high school friendship gone bad into an enemy,” Ives said in a Tuesday note.
Investors are now focused on whether this public clash could impact regulatory pathways crucial to Tesla’s future projects, particularly in autonomous driving.
They fear that “the Trump Administration will be more hawkish and show scrutiny around Musk-related U.S. government spending related to Tesla/SpaceX and most importantly the autonomous future,” Ives noted.
However, the analyst believes tensions will eventually ease, stressing that "Musk needs Trump and Trump needs Musk given the AI Arms Race going on between the U.S and China."
Wedbush maintains its Outperform rating and $500 price target on Tesla.
Nonetheless, Ives warns that political distractions could weigh on the automaker. “At the end of the day being on Trump’s bad side will not turn out well... and Musk knows this and Tesla investors want this back and forth to end.”