Why Trump Media Stock Was Soaring This Week

Shares of Trump Media & Technology (NASDAQ: DJT) were among the winners this week as Tesla CEO Elon Musk's appearance at a Trump rally last weekend seemed to help spark a rally in the stock, which seems to rise and fall according to Trump's political fortunes.

The company also launched its Truth+ streaming app for Android phones, extending the reach of the company with content that includes news and entertainment.

According to data from S&P Global Market Intelligence, the stock was up 44% as of trading on Thursday afternoon.

Image source: Getty Images.

Are Trump's prospects improving?

Shares of Trump Media jumped on Monday and Tuesday in response to a surprise appearance by Musk at a Trump rally in Pennsylvania on Sunday. Musk's support of the former president was widely known, but Trump Media investors seem to be hopeful that Musk's enthusiastic support could help Trump and his company.

Finally, the news that Truth+ had launched on Android also gave the stock a boost on Thursday. Trump Media said the streaming service would launch on iOS and other platforms in the near future. It's likely to have trouble breaking through in a crowded streaming sector, but it can win over some Trump fans.

Can Trump Media stock keep gaining?

Trump Media has been volatile since March and will continue to be so, at least through the election.

While the stock seems greatly overvalued based on its underlying business that generates less than $1 million in revenue per quarter and comparable market values of other media companies, investors see the stock as an avatar for Trump himself. If his electoral prospects improve, expect the stock to move higher in the coming weeks.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.