Trump-Musk Feud Likely A 'Planned Strategy,' Says Morgan Stanley, Calling Musk And Politics 'Inseparable' While Staying Bullish On Tesla

Elon Musk‘s recent public spat with President Donald Trump might have been a strategic move, according to Morgan Stanley analysts.

What Happened: The dispute began when Musk criticized Trump’s tax bill, resulting in a 14% plunge in Tesla’s stock and a $150 billion market value loss in a single day. In response, Trump threatened to cancel federal contracts with Musk’s companies, including SpaceX. At one point, Musk considered decommissioning the Dragon spacecraft but later abandoned the idea.

"Likely [the feud] part of a planned strategy by Elon to achieve a specific goal with his approach designed to bring maximum public attention to the issue," stated Morgan Stanley, reported Finbold.

Despite this, Morgan Stanley remains bullish on Tesla, raising its price target from $400 to $410 while reiterating it as their ‘top pick’ in the U.S. auto sector. They highlighted Tesla’s leading position in physical artificial intelligence (AI) and other sectors, stating that Tesla is uniquely positioned in these areas.

The analysts pointed out that Musk's political engagement is now closely linked to Tesla's investment narrative. They warned that investors expecting Musk to concentrate only on Tesla might be ignoring an ongoing trend. “The two are very much inseparable,” stated Morgan Stanley as reported by Investing.com.

While acknowledging the possible downsides of Musk's public stance, Morgan Stanley remains confident that Tesla's leadership recognizes and understands these risks.

Morgan Stanley does not foresee any long-term effects of the rift between Musk and Trump.

Today's Best Finance Deals

Why It Matters: This feud and its subsequent fallout have been closely watched by investors and analysts alike. Despite the tension, Wedbush Securities’ managing director Dan Ives reiterated his bullish views on Tesla on June 9. Trump also expressed his intention to keep his Tesla Model S and Starlink satellite internet service, indicating a cooling of tensions.

On June 11th, Musk expressed regret over his comments about Trump, stating they “went too far.” Despite the controversy, Musk deemed the $113 billion loss he incurred while working on DOGE “worth it.”

These events highlight the complex relationship between politics and business, with potential impacts on investor sentiment and market dynamics. Despite the controversy, Morgan Stanley’s increased price target indicates continued confidence in Tesla’s future.