Tesla (NASDAQ:TSLA) inventory surged on Donald Trump’s victory, owing to Elon Musk’s obvious alliance with the previous president. Unsurprisingly, it was essentially the most purchased inventory by buyers utilizing the Hargreaves Lansdown platform final week.

Nonetheless, curiously, Tesla was additionally essentially the most offered inventory in the course of the week, maybe indicating that some buyers had been seeking to money in on the surging shares — the inventory jumped 31% final week.

MicroStrategy (NASDAQ:MSTR) was the second-most purchased inventory by Hargreaves Lansdown buyers who seemingly wished to US shares and the ‘Trump Trade’ relatively than these nearer to house.

So, let’s take a better look as to why buyers may need been considering these two firms.

Tesla: an ally in The White Home

Buyers flocked to Tesla shares following Trump’s presidential victory for a number of key causes.

Firstly, Musk’s vocal assist for Trump might outcome within the South African billionaire having affect within the incoming presidency. Trump has even instructed Musk might have an effectivity position throughout the administration.

Secondly, Trump’s proposed insurance policies, together with decrease company taxes and deregulation, are considered as doubtlessly useful for Tesla’s progress and profitability. Moreover, Trump’s stance on tariffs, notably towards Chinese language imports, might give Tesla a aggressive edge over overseas EV producers within the US market.

Furthermore, the potential discount in EV subsidies below Trump’s administration can be seen as doubtlessly benefiting cash-rich Tesla greater than its smaller opponents, given the corporate’s dominant market place and scale.

Lastly, however doubtlessly most significantly, buyers speculated that Musk’s relationship with Trump might result in advantageous insurance policies for Tesla, notably in areas like autonomous driving rules.

That is essential as a result of Tesla inventory is valued on its potential within the autonomous driving realm and robotics, with a price-to-earnings (P/E) ratio of 100 occasions — that’s 5 occasions increased than EV friends.

Personally, I’d argue that the corporate is falling behind the likes of Waymo and Chinese language friends as its Robotaxi reveal fell considerably flat.

It’s a really costly inventory, which in all probability explains why it was additionally essentially the most offered inventory final week by Hargreaves Lansdown buyers. It’s additionally not on my watchlist given the inventory’s insane multiples.

MicroStrategy: a Bitcoin play

Buyers flocked to MicroStrategy — an American Bitcoin growth firm — inventory final week, pushed by a surge in Bitcoin’s price following Trump’s election victory.

Trump’s surprising pro-crypto stance, together with guarantees to make the US a “crypto capital” and set up a nationwide Bitcoin reserve, ignited enthusiasm within the cryptocurrency market.

This was coupled with a pledge to finish the “anti-crypto crusade” and substitute SEC Chair Gary Gensler, signalling a doubtlessly extra beneficial regulatory surroundings for digital belongings.

This shift in Trump’s strategy to cryptocurrencies led to Bitcoin hovering above $80,000, straight benefiting MicroStrategy as a consequence of its substantial Bitcoin holdings.

The corporate’s ’21/21 Plan’ will see it make investments $42bn in Bitcoin over the following three years and this seems to align effectively with the market’s renewed optimism for crypto.

It’s an attention-grabbing firm however I’m nonetheless unconvinced by crypto. There’s no P/E ratio because it’s not forecasted to show a revenue this 12 months regardless of surging crypto holdings. As soon as once more, it’s a inventory I’m staying away from as I favor extra predictable industries.