Why Tesla Stock Is Jumping Today

Tesla (NASDAQ:TSLA) stock is climbing in Thursday's trading. The electric vehicle (EV) company's share price was up 3.7% as of 2:30 p.m. ET.

Tesla stock is gaining ground today following bullish coverage from Bank of America analyst John Murphy. The analyst raised the bank's one-year price target on the stock from $350 per share to $400 per share, which suggests additional pricing upside of roughly 8.5% as of this writing.

Bank of America gets more bullish on Tesla

Before the market opened this morning, Murphy published a note reiterating a buy rating on Tesla and raising his one-year price target on the stock from $350 per share to $400 per share. Murphy's buy rating and price target increase comes on the heels of a recent tour of Tesla's Texas Gigafactory and meetings with investor relations officials. Murphy thinks Tesla has a strong outlook heading into 2025 and that its robataxi launch, robotics projects, full self-driving software, and margin improvements for the core business could be positive catalysts for the stock.

What comes next for Tesla stock?

Tesla stock has been red hot lately, rocketing 53% higher over the last month. The EV leader's share price has gained ground thanks to excitement about CEO Elon Musk's relationship with the incoming Trump administration and the anticipation of potential macroeconomic catalysts including cuts for interest rates and corporate taxes.

Investors are also betting that Tesla could benefit from other political and macroeconomic developments. Some investors and analysts expect that the Trump administration will wind up removing rebate credits and tax incentives that promote the sale of electric vehicles. While such a move would likely reduce demand in the overall EV space, it could have the effect of improving Tesla's competitive positioning because it will make it more difficult for smaller rivals to scale their business in a cost-effective fashion. The imposition of high tariffs on imported Chinese EVs could also help to minimize a major competitive risk for Tesla.

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Bank of America is an advertising partner of Motley Fool Money. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America and Tesla. The Motley Fool has a disclosure policy.