The Shift from the Trump Trade to the Musk Trade: What Investors Should Know

In the wake of Donald Trump’s presidential election victory, we witnessed an immediate uptick in asset values that some dubbed the Trump trade. However, as the administration’s first year unfolded, it became clear that the initial surge was more about hope than sustainable action. Now, the focus has shifted—and decisively so—to what might be more accurately termed the Musk trade. Elon Musk’s influence on the markets is transcending anything Trump could muster, presenting savvy investors with opportunities previously overlooked.

The Rise and Fizzle of the Trump Trade

The Trump trade sparked excitement in various sectors, particularly in stocks and cryptocurrencies. Yet, as we’ve observed, expectations collided with the reality of indecisive governance—especially regarding critical policies like tariffs. Investors who banked on the Trump trade have found themselves wringing their hands as the promised wave of economic rejuvenation failed to materialize. Instead of focusing solely on this fleeting momentum, astute investors would do well to consider where the real dynamism lies: in the ventures attributable to Musk.

The Impressively Profitable Musk Trade

Elon Musk has positioned himself not merely as a business mogul but as a market-moving force. Bloomberg recently reported that his net worth has skyrocketed by approximately $135 billion since Trump’s election victory. Here are five definitive areas where the Musk trade is outperforming its predecessor:

Tesla’s Electric Future

Despite some volatility, Tesla stock has surged by 42% since the election. Musk’s aggressive 2025 plan includes an ambitious rollout of automated Cybercabs in Austin, which could profoundly impact the electric vehicle market. Furthermore, analysts suggest that Trump’s efforts to roll back Biden-era EV tax credits will serve as a financial headwind for Tesla’s competitors, thereby enhancing Musk’s market position.

The Dogecoin Phenomenon

The cryptocurrency market has been buzzing, particularly around Dogecoin. Since Trump took office, Dogecoin’s value has skyrocketed by around 60%, showcasing Musk’s extraordinary influence over this meme-inspired currency. Sensing the buzz around Dogecoin, investors have rallied behind the token, proving once again that where Musk goes, enthusiasm—and profit—follows.

The Resurgence of X (formerly Twitter)

In a stark contrast to its pre-Musk days, X has seen a financial revival. The banks that facilitated Musk’s acquisition of the platform were able to sell off $4.74 billion in previously considered undesirable debt last week—demonstrating a renewed investor appetite. Earnings before interest, taxes, depreciation, and amortization (EBITDA) were reported at $1.2 billion for 2024, mirroring financial performance prior to Musk’s ownership. Major companies, including Apple and Amazon, are re-engaging with X, enhancing its advertising revenue stream.

The Rise of xAI

Musk’s foray into the Artificial Intelligence sector with xAI has caught investors’ attention. The company is allegedly in a bid to raise $10 billion at a staggering projected $75 billion valuation. This represents an 88% increase from its December 2022 value of $40 billion. Industry experts, including Ross Gerber—CEO of Gerber Kawasaki—have noted Musk’s singular focus and talent in the AI domain.

SpaceX’s Unprecedented Valuation

Finally, Musk’s space venture, SpaceX, has witnessed an impressive rise in valuation—from $210 billion to $350 billion in merely a few months following the election. The company is abundantly navigating lucrative deals for its Starlink satellite internet service, extending its reach not just across the United States but also into international markets, as evidenced by discussions for a potential $1.6 billion deal with the Italian government.

Conclusion: An Investment Shift

The wisdom for investors today is clear: the predicted longevity of the Trump trade is waning, while the Musk trade is burgeoning with opportunity. With a sharp focus on innovation and an uncanny knack for generating investor enthusiasm, Musk has proven to be a formidable force in today’s financial landscape.

For those willing to pivot, the results speak for themselves: robust growth in tech and finance linked directly to Musk’s ventures not only offers potential for significant returns but also represents the future of market dynamics. Investing in what Musk touches might not just be a gamble—it’s a strategic move in the current economic climate.