The crack in the Tesla Inc. stock market has made it one of the most valuable American companies. But in a number of important ways, the EV manufacturer is very different from the size of other companies.
Tesla’s stock is up more than 300% in the past year, pushing the company’s market cap above $ 800 billion before pulling out. The company’s valuation as of Thursday outpaced the next seven largest automakers combined, putting the company shoulder to shoulder with market giants: Apple Inc., Microsoft Corp., Amazon.com Inc., Google parent Alphabet Inc. and Facebook Inc.
Here’s a look at how Tesla got here and how the arc compares to other companies in the S&P 500:
It quickly became extremely valuable
After 244 days, the time it took Tesla’s market value to grow from $ 100 billion to $ 800 billion was significantly faster than its competitors. The 17-year-old company has benefited immensely from investors who embrace Chief Executive Officer Elon Musk’s vision of electric vehicles and his idea that Tesla is not just a car manufacturer, but a technology company. Optimism about a transition to electric vehicles has led to record gains in the share of electric car and battery manufacturers in the past year.
Federal Reserve measures have helped attract more investors to stocks and major indices. The central bank cut interest rates and bought billions of dollars in bonds, bringing long-term Treasury yields close to zero, while interest rates on other fixed-income securities recovered to pre-pandemic levels. With such low returns offered by bonds, investors tend to turn to riskier assets such as stocks.