Billionaire Elon Musk is the first person ever worth more than $400 billion, thanks to a continue surge in the price of Tesla Inc (NASDAQ:TSLA) stock since Donald Trump won the 2024 presidential election.
What Happened: Tesla stock is trading higher Wednesday with several analysts raising their price targets on the electric vehicle company.
With shares briefly hitting a new 52-week high of $415 on Wednesday, Tesla has hit a new all-time high. The stock previously hit an all-time high of $414.50 on Nov. 4, 2021, and has an all-time closing high of $409.97 on the same day, which it could also surpass Wednesday if the gains hold.
The soaring price of Tesla stock helped boost Musk’s wealth to $439.2 billion on Wednesday, according to a Bloomberg report.
The increase comes from Tesla gains and from a recent share sale for SpaceX, the space company founded by Musk. SpaceX is now valued at $350 billion, a valuation that added around $50 billion to Musk's wealth, according to the report.
The valuation of artificial intelligence company xAI, founded by Musk, has also witnessed its valuation more than double since May, adding to Musk's wealth gains.
Musk has added $210.2 billion to his wealth in 2024, based on a year-end valuation of $229 billion in 2023 by Bloomberg. This 2024 gain is more than all the richest people in the world are worth except for second and third place Jeff Bezos ($244 billion) and Mark Zuckerberg ($219 billion), respectively.
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Why It's Important: The wealth of Musk has increased by 66% since the 2024 election according to Bloomberg. The gains come with Tesla shares up significantly since Trump's win.
Tesla stock closed at $251.44 on Nov. 5, the day of the 2024 presidential election. The stock closed at $288.53 the next day, posting a significant one-day gain. The stock is up 66.1% year-to-date with the majority of gains coming from early November until now.
While Musk's wealth is already up significantly in 2024, it could increase further in the coming years. Musk could benefit from the new White House administration, which could eliminate EV tax credits that would hurt Tesla competitors.
There is also optimism that the new administration could support regulation for self-driving vehicles such as the Tesla robotaxi, reversing course on Trump's previous plan to ban autonomous vehicles.
Musk, who publicly supported Trump, donated money to his campaign and rallied in swing state Pennsylvania, has been picked by the president-elect to co-lead the Department of Government Efficiency.
The Department of Government Efficiency will look at cutting costs in government spending, but could also provide benefits to Musk or take on his competitors. A report said the D.O.G.E. will look into a government loan given to Tesla EV rival Rivian Automotive.
Trump has voiced support of Musk's space ambitions and the announcement that Trump will nominate Jared Isaacman to lead NASA could help SpaceX. Isaacman is an investor in SpaceX via his payments company Shift4 Payments, according to the report. Isaacman has also been on a commercial spacewalk via a chartered SpaceX launch.
The support for SpaceX by Isaacman could see the company get more government contracts and could boost the valuation further in the coming years.
One item that could dent Musk's wealth is the pending case against his 2018 Tesla pay compensation plan. A Delaware judge struck down the plan again, despite shareholder approval, but Tesla said it will appeal the decision. Without the pay package, Musk would still be the world's richest person, but not at such a high level.
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