Tesla stock rebound prospects have brightened as reports suggest that Elon Musk may soon, perhaps in the coming weeks, step back from his government duties. The electric vehicle maker’s shares saw some dramatic price swings on Wednesday after news broke about the CEO’s possible shift in focus back to his companies.

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How Elon Musk’s Potential Departure from Doge Sparked a Tesla Stock Rebound

Market’s Immediate Response

Tesla’s stock rebound was quite evident when Politico reported that Trump had told people close to him, including Cabinet members, that Musk would be stepping back from his government role. The stock, which had dropped around 4.6% following disappointing delivery numbers, suddenly surged about 11% before settling approximately 5% higher as investors processed this surprising news.

The White House press secretary responded to the report on X, noting that both Musk and Trump have consistently maintained that Musk would leave when “his incredible work at DOGE is complete.”

Also, CoinCodex analysts claim:

Tesla is predicted to start the second quarter of the year with a potential increase to as high as $ 310.76, which would mark a 14.58% change compared to the current price. TSLA is expected to trade between $ 273.55 on the lower end and $ 310.76 on the higher end, generating an average price of $ 290.02.

Musk’s Divided Attention

Investors and analysts have long worried about Elon Musk’s Tesla leadership being sort of compromised by his other ventures and distractions. Even before joining the Trump administration, Musk was already juggling multiple companies, and also dealing with his controversial overhaul of Twitter, which is now known as X.

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Tesla stock rebound hopes are tied to investors’ desire for a more focused CEO right now. The company has lost approximately one-third of its value in 2024, which makes it the worst performer among the Magnificent Seven tech stocks by a significant margin at the time of writing.

Political Complications

Musk’s enthusiastic support for Trump throughout the campaign and during the first 100 days was initially viewed as strategic positioning for a more favorable regulatory environment for Tesla’s autonomous driving and AI initiatives. However, the market reaction suggests his approach may have backfired due to his increasingly polarizing political activities both in the US and Europe.

Musk’s government role coincided with what many people, including some Republicans, perceived as a rather callous approach to American workers and essential programs. By involving himself so prominently in politics, Musk effectively made recent elections almost like a referendum on himself and his values.

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Investor Sentiment Shift

Elon Musk’s Tesla leadership returning to a full-time status could mark an important turning point for the company. The Tesla stock rebound following the news of his potential DOGE departure demonstrates that investors truly believe a focused Musk is crucial for Tesla’s long-term success.

Throughout 2024, investors have repeatedly and consistently urged Musk to “lock in” and concentrate on Tesla’s core business. The market reaction to his potential exit from government responsibilities shows such clear relief among shareholders who have watched the stock underperform for months on end.

The Elon Musk news triggered what many hope could become a sustained market reaction and recovery for the beleaguered EV maker, potentially reversing months of decline and also restoring some much-needed investor confidence in the company’s future prospects.