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Elon Musk’s announcement that he’d be largely stepping back from his role in the Trump administration to focus on being Tesla’s (TSLA) CEO was welcome news to investors.
In a Wednesday note, Wedbush Securities analyst and longtime Tesla bull Dan Ives called Musk’s move toward leaving the Department of Government Efficiency (DOGE) a “turning point” for Tesla, which has desperately needed one.
The company released a brutal first-quarter earnings report Tuesday: Net income sank 71%, and the company missed estimates on revenue and adjusted earnings per share. After Musk said during the post-release earnings call that he’d be allocating “far more” of his time to Tesla, the company’s stock popped 7% despite those dismal earnings.
Wedbush increased its Tesla stock price target from $315 to $350 and maintained its “outperform” rating.
Ives called the conference call a “pivotal” one as the CEO looks to “turn the corner from this dark chapter as 1Q numbers ended a disaster quarter in which deliveries were very soft and Tesla missed the Street on basically every metric.”
He wrote, “In essence, this was an off ramp for Musk out of the Trump White House in our view as the global brand damage, political firestorm, and perfect storm chaos over the past few months will now end this volatile political chapter for Musk.”
The CEO has been the face of DOGE’s cost- and job-cutting measures, and Musk has been seen at the White House countless times. As a result, people looking to protest the president and his administration’s policies have found an easy target in the automaker.
Ives wrote, “The brand damage caused by Musk in the White House/DOGE over the past few months will not go away just by this move and some of the damage will be stained forever ... but this was the time to close one dark chapter and open a brighter one for the Tesla story with autonomous and robotics front and center.”
He added: “Musk is Tesla and Tesla is Musk.”
In Tesla’s earnings report, the Cybercab and Tesla Semi were given a “construction” designation, while the Roadster shifted to “design development.” And on the earnings call, Musk said Tesla’s robotaxis would move the financial needle by the middle of next year. He also said Tesla’s Optimus robots are coming along and that there would be thousands of the robots working in Tesla factories by the end of the year.
Ives said it won’t necessarily be smooth sailing for the automaker over the coming year (he noted headwinds, tariffs, and clear growth challenges), but “Musk recommitting as CEO as Tesla ... is the biggest and best possible news Tesla investors could have heard last night.”
He added, “Tesla got back its biggest asset... Musk.”