Dan Ives Weighs In On Musk-Trump Drama, Says Stock Reaction Overblown: 'I Still Believe They're Allies'

On Friday, Wedbush analyst Dan Ives weighed in on the ongoing war of words between Elon Musk and Donald Trump, reassuring investors that despite the recent drama, Tesla Inc.’s TSLA long-term growth prospects remain strong.

What Happened: In an appearance on Yahoo Finance's Market Domination, Ives described the public fallout between Musk and Trump as a “Twilight Zone” moment, comparing it to a junior high school fight.

The fallout, which saw Musk pulling away from Trump, sparked concern among investors, especially given the critical role Trump has played in supporting Musk's autonomous vehicle roadmap.

“I think it caught investors off guard because you knew Musk was pulling away, but you didn’t think that this was actually going to start really a battle where a friend could become an enemy,” he stated, referring to the stock price drop on Thursday.

Investors were worried that the rift could negatively affect Tesla's future regulatory support, particularly regarding autonomous vehicles.

However, Ives described the market's reaction as “an overreaction,” suggesting that while the tension between the two men may create short-term volatility, it wouldn’t derail Tesla's long-term success.

“I still believe they’re allies and it doesn’t change my view that the regulatory road map is going to be more greenlighted for Tesla,” he stated, adding, “I don’t think that this is the beginning of a dark storm between Musk and Trump.”

Why It's Important: Tesla saw its stock drop by 14.3% to $284.70 on Thursday, marking its second-largest percentage loss in over a year and the largest market cap loss in the company's history.

The company's market value plummeted by a record $152 billion, pushing Tesla out of the $1 trillion market cap club. This decline followed Musk’s public criticism of Trump's “Big Beautiful Bill.”

However, during Friday's regular session, the share price rebounded by 3.67%, reaching $295.14, according to data from Benzinga Pro.

Benzinga’s Edge Stock Rankings indicate that although the stock is facing negative trends in the short and medium term, its long-term outlook remains positive. For more detailed metrics, click here.