Following the recent presidential election, the market buzzed with excitement, dubbing it the “Trump trade”, as assets from stocks to cryptocurrencies experienced an initial surge.
However, as policies wavered and tariffs remained uncertain, the initial enthusiasm cooled.
Now, a different force seems to be captivating investors: Elon Musk.
Forget the Trump trade – the “Musk trade” might be the most lucrative play in the current market landscape.
Musk’s midas touch: a $135 billion surge in net worth
The most compelling evidence of this shift lies in Musk’s personal fortune.
Bloomberg data reveals that his net worth has ballooned by approximately $135 billion since the election.
But the “Musk trade” extends beyond individual wealth, permeating his diverse array of companies, both public and private, and even assets that act as real-time gauges of sentiment toward the often-polarizing Tesla CEO.
Tesla’s electrifying rise: navigating policy headwinds
Despite some turbulence this year, Tesla stock has closed up by an impressive 42% since the election.
Musk’s ambitious plans for 2025, including the launch of a network of automated Cybercabs in Austin, Texas, and a return to vehicle sales growth, are fueling investor optimism.
Ironically, Trump’s plan to roll back Biden-era tax credits for electric vehicles is seen by many Wall Street analysts as a potential advantage for Tesla, hindering its competitors.
Dogecoin’s resurgence: riding the meme coin wave
The meme cryptocurrency Dogecoin, long championed by Musk, has surged by roughly 60% since the election victory.
Musk’s affinity for the Shiba Inu-inspired coin is well-known, even leading him to name the Department of Government Efficiency after it.
The recent surge in meme coins has allowed Dogecoin, the original meme token, to capitalize on the enthusiasm generated by Musk’s prominent position in the public discourse.
X’s financial turnaround: from debt burden to market darling
X, formerly Twitter, has experienced a remarkable resurgence in recent months, at least financially.
Banks that financed Musk’s acquisition of the social media platform have successfully sold off much of the previously unappealing debt they had been holding since 2022.
The latest tranche of this debt, totaling $4.74 billion, was sold last week at face value.
Demand exceeded expectations, prompting Morgan Stanley and other banks to increase the sale from the initially planned $3 billion.
This reversal of fortune aligns with recent financial data indicating that X generated EBITDA of $1.2 billion in 2024, roughly the same as the period before Musk’s takeover.
Furthermore, advertisers are returning to the platform, with major players like Apple, Amazon, Robinhood, and Chinese e-commerce giant Temu ranking among the top spenders in January.
xAI’s valuation skyrockets
Elon Musk’s xAI, a direct competitor to OpenAI, is also benefiting from a surge of investor interest.
The company, which is rapidly constructing a massive AI data center in Memphis, is reportedly in talks to raise $10 billion at a $75 billion valuation, according to Bloomberg.
This would represent an impressive 88% increase from its $40 billion valuation in December, when it raised $6 billion in a Series C funding round.
SpaceX’s orbital trajectory
SpaceX, Musk’s spaceflight company, is another entity that has witnessed its valuation soar since the election.
In December, the company sold shares at a $350 billion valuation, a significant 67% increase from its previous valuation of $210 billion.
SpaceX is actively securing deals for its satellite internet division, Starlink, with companies such as T-Mobile.
Moreover, international governments are also showing interest, with the Italian government reportedly considering a $1.6 billion deal for secure telephone and internet services via Starlink.
This surge across Musk’s diverse ventures paints a clear picture: the market is increasingly betting on his vision and execution.
While the “Trump trade” may have faded, the “Musk trade” appears to be just getting started.
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