Tesla stock, MicroStrategy: here’s what Hargreaves Lansdown investors bought last week

Tesla (NASDAQ: TSLA) stock surged with Donald Trump’s victory, thanks to Elon Musk’s apparent relationship with the former president. Unsurprisingly, it was the stock most bought by investors using the Hargreaves Lansdowne arena last week.

However, it is interesting that Tesla was also the best-selling stock during the week, perhaps indicating that some investors wanted to cash in on the rising stock – the stock jumped 31% last week.

MicroStrategy (NASDAQ:MSTR) was the second most bought stock by Hargreaves Lansdown investors who appeared to be looking for US stocks and ‘Trump Trade’ rather than those closer to home.

So, let’s take a closer look at why investors might be interested in these two companies.

Tesla: you are a partner in the White House

Investors flocked to Tesla shares following Trump’s presidential victory for several key reasons.

First, Musk’s verbal support for Trump could lead to the South African billionaire influencing the incoming presidency. Trump even suggested that Musk could play a more effective role in the administration.

Second, Trump’s proposed policies, including lower corporate taxes and deregulation, are seen as potentially beneficial to Tesla’s growth and profitability. Additionally, Trump’s stance on tariffs, particularly against imports from China, could give Tesla a competitive edge against foreign EV manufacturers in the US market.

In addition, a possible reduction in EV subsidies under the Trump administration is also seen as likely to benefit cash-rich Tesla more than its smaller rivals, given the company’s position and leading markets.

Last, but not least, investors are speculating that Musk’s relationship with Trump could lead to beneficial policies for Tesla, especially in areas such as autonomous driving regulations.

This is important because Tesla stock is known for its strength in the autonomous driving and robotics space, with a price-to-earnings (P/E) ratio of 100 times — that’s five times higher than its EV peers.

Personally, I would argue that the company is following the likes of Waymo and its Chinese peers as Robotaxi revealed that it has slowed down a bit.

It is a very expensive asset, which probably explains why it was sold again last week by Hargreaves Lansdown investors. And it’s not on my watch list given the stock’s insane multiple.

MicroStrategy: the Bitcoin game

Investors flocked to MicroStrategy – an American Bitcoin development company – stock last week, driven by the increase in the value of Bitcoin following Trump’s election victory.

Trump’s unexpected pro-crypto stance, including promises to make the US a “crypto currency” and established a national Bitcoin repository, which sparked excitement in the cryptocurrency market.

This is combined with a pledge to end “the anti-crypto crusade” and instead of SEC Chairman Gary Gensler, indicating a potentially better regulatory environment for digital assets.

This change in Trump’s approach to cryptocurrency led Bitcoin to rise above $80,000, directly benefiting MicroStrategy due to its large holdings of Bitcoin.

The company’s ’21/21 Plan’ will see it invest $42bn in Bitcoin over the next three years and this seems to align well with the market’s renewed optimism in the crypto.

It’s an interesting company but I’m still not satisfied with crypto. There is no P/E ratio as it can be predicted to be profitable this year despite the growth of crypto holdings. Again, it’s a stock I don’t hold as I prefer predictable industries.