The stock market of Tesla Inc. has made it one of the most valuable U.S. companies. But in some key respects, the electric car manufacturer is very different from the size of other companies.
Tesla shares have risen more than 300% over the past year, raising the company’s market capitalization above $ 800 billion before retiring. The company’s valuation as of Thursday was higher than the next seven largest carmakers combined, placing the company shoulder to shoulder with market giants: Apple Inc., Microsoft Corp., Amazon.com Inc., Google parent Alphabet Inc. and Facebook Inc.
Here’s how Tesla came about and how it compares its bow to other S&P 500 companies:
It became extremely valuable, fast
In 244 days, the time it took Tesla’s market value to grow from $ 100,000 to $ 800 billion significantly outperformed its peers. The 17-year-old company has benefited enormously from investors who adopted CEO Elon Musk’s view on electric vehicles and his idea that Tesla is not just a vehicle manufacturer, but a technology company. Optimism about a transition to electric vehicles has fueled record gains in the shares of electric vehicle and battery manufacturers over the past year.
Federal Reserve stocks have helped drive more investors toward significant stocks and indices. The central bank cut interest rates and bought billions of dollars in bonds, sending long-term Treasury yields nearly zero, while yields on other fixed-income securities recovered to pre-pandemic levels. With such low returns offered by bonds, investors tend to resort to riskier assets, such as stocks.