Brace for Donald Trump’s Truth Social (DJT) Stock Rollercoaster

Trump has been making strong political moves, including securing the return of Hamas’s hostages, pushing for peace negotiations in Ukraine, and maintaining a stable but firm relationship with China. However, political success doesn’t guarantee success for DJT stock—unless the market continues to push its price higher based on sentiment rather than substance.

The company’s primary asset, Truth Social, has just 2 million monthly active users, a fraction of the 600 million on X or the 3.98 billion across Meta’s platforms—making it a relatively puny competitor in social media.

Further afield, DJT also plans to expand into financial services with Truth.Fi, a fintech brand offering investment products focusing on cryptocurrencies. While this venture could unlock significant upside, it remains highly speculative. That said, Trump’s connections with prominent tech figures, such as Elon Musk and other billionaire entrepreneurs, could eventually turn DJT’s financial arm into something far more substantial.

The proposed push into ETFs is an excellent example of potential price catalysts coming down the track for DJT. For bullish speculators, the hope is that Trump and Musk push financial access and crypto acceptance into total ubiquity while pocketing enormous rewards for themselves.

Currently, DJT’s price action is inextricably tied to the news cycle and Trump’s political activities rather than the company’s fundamentals. For example, in October 2024, DJT surged 130% purely on investor optimism surrounding Trump’s electoral prospects. However, post-election, the stock struggled to maintain its gains—a sign of caution in the market regarding its long-term investment case.

The real turning point for DJT could be its financial division. If Truth.Fi generates meaningful compounded returns; sentiment-driven investors will realize there is value in DJT after all. Additionally, if Trump continues to broker geopolitical stability and remains highly visible alongside power players like Larry Ellison, Rupert Murdoch, Sam Altman, and Elon Musk, DJT’s momentum could be sustained purely on sentiment and brand value.

It’s no secret that we’re in an era where fundamentals don’t rule the market. While fundamentals remain the ultimate driver of long-term value, we’re seeing stocks with massive valuation multiples for extended periods without a single profitable dollar to show for it. Trump’s startup could still sustain high valuation multiples simply because Trump is the most famous person on the planet with a knack for surprising everyone. This makes DJT an ideal speculative investment—but to turn sentiment into sustainable long-term value, its financial services arm must deliver.

High-multiple stocks can sustain elevated valuations but remain highly vulnerable to volatility, particularly in response to macroeconomic conditions and operational setbacks. Timing is key for any potential DJT investors, with short-term entries and exits possibly being a viable strategy. However, getting caught in the price gyrations likely to ensue this year will be precarious.

From a technical perspective, DJT looks moderately bearish right now. The 50-day moving average has exceeded the 200-day moving average, signaling short-term upward momentum. However, the Relative Strength Index (RSI) is nearing 40, indicating the stock is under selling pressure. Better entry points may emerge in the near term. On TipRanks, the technical sentiment on DJT is skewed to the downside.

Ultimately, DJT is a sentiment-driven stock that doesn’t align with my investment strategy. I seek to allocate capital toward highly productive businesses with strong cash flows and reasonable valuations relative to their fundamental performance. However, for those with greater risk appetite than I and those who want an exciting entry into political intrigue via the stock market, then DJT may just be the ticket. Allocating a small portion of one’s portfolio to DJT simply for the joyride could appeal to politically astute speculators.

Wall Street analysts have not issued any public ratings on DJT, mainly because the company has generated minimal revenue and substantial losses since its inception. Its latest income statement reports $3.4 million in trailing 12-month revenue and a net loss of $372.4 million.

Given its speculative nature and lack of fundamental support, DJT’s extreme market volatility has kept it off Wall Street’s priority list as analysts focus on more established businesses.

While Truth Social lacks significant growth potential, Truth.Fi has a real opportunity to create long-term value if it is correctly executed. The Trump brand alone adds intangible asset value, which could keep DJT trading at a premium for an extended period.

Moreover, if Trump lives up to his promises and changes the way America operates, including legitimizing cryptocurrencies, boosting the domestic U.S. labor market, protecting domestic industries, fastracking AI infrastructure, and funding large-scale building projects, the potential rewards of those enterprises could be immense, for the U.S. as a nation, the man himself, DJT as a company and DJT investors to boot. Winners all around.

However, for value investors like me, DJT’s value is far too intangible to warrant an investment. As the most powerful man in the world, the U.S. President wields tremendous influence, making DJT a speculative swing for the fences that could end up paying off for investors. However, it could all turn to tears if outcomes don’t match giddy aspirations — which is often the case in politics and economics. In fact, most hypes, memes, and fads tend to come and go rather quickly while reminding investors that what looks too good to be true usually is, especially in the stock market.

Disclosure