Musk’s Trump Feud: A Calculated Financial Play?

Wall Street analysts at Morgan Stanley believe Elon Musk’s recent, highly public dispute with former President Donald Trump was a calculated move designed to draw maximum attention to Musk’s opposition to a large congressional spending bill. According to a report by Investing.com, the analysts suggest Musk’s “communication campaign” was likely a deliberate strategy to achieve a specific goal.

The feud escalated last week after Musk labeled the bill an “outrageous, pork-filled abomination” on his social media platform. While acknowledging the potential for negative public perception of Tesla (NASDAQ:TSLA) due to Musk’s political involvement, Morgan Stanley indicated that company management likely anticipated this outcome.

The firm argues that Musk’s business and political interests are intrinsically linked, with the financial health of the United States – specifically the budget deficit and national debt – being a key priority for the Tesla CEO. Despite Musk’s stated intention to focus solely on Tesla, Morgan Stanley maintains its confidence in the company’s long-term vision, reiterating its “Top Pick” status for U.S. autos.

Interestingly, the timing of the public split between Musk and Trump coincided with Morgan Stanley’s efforts to help Musk’s AI company, xAI, raise $5 billion. According to reports from the Wall Street Journal and Data Center Dynamics, xAI executives were actively seeking funding for a data center buildout and its AI chatbot, Grok, on the same day the feud became public. Morgan Stanley had reportedly been hoping to sell debt for xAI, leveraging the previously strong relationship between Trump and Musk to bolster stock performance in Musk’s businesses and reverse a valuation decline of social platform X, which is merging with xAI.

It’s a fascinating confluence of events. While Musk may genuinely oppose the spending bill, the timing certainly raises questions about whether the public disagreement was, at least in part, a strategic maneuver to create favorable conditions for xAI’s fundraising efforts. The close ties between Morgan Stanley and both Musk and, previously, Trump, further complicate the narrative. It appears a complex interplay of politics, finance, and public relations is at play, and the public feud may be less about genuine disagreement and more about carefully orchestrated positioning.