Tesla Inc. its split in the stock market has made it one of the most valuable U.S. companies. But in some important ways, the manufacturer of electric cars is very different from other companies.
Tesla’s shares have risen more than 300% in the past year, bringing the company’s market capitalization above $ 800 billion. The company’s valuation from Thursday was higher than the following seven largest automakers combined, which put the company shoulder to shoulder with giants in the market: Apple Inc., Microsoft Corp., Amazon.com Inc., Google’s parent Alphabet Inc. and Facebook Inc.
Here’s a look at how Tesla got here and how its arc can be compared to other companies in the S&P 500:
It quickly became very valuable
In 244 days, the time it took Tesla’s market value to grow from $ 100 billion to $ 800 billion far exceeded its peers. The 17-year-old company has benefited greatly from investors Elon Musk, vision on electric vehicles, and his view that Tesla is not just a carmaker, but a technology company. Optimism about the transition to electric vehicles has fueled record gains in shares of EV and battery manufacturers over the past year.
Action by the Federal Reserve has contributed to more investors pushing for equities and important indices. The central bank lowered interest rates and bought billions of dollars worth of bonds, sending long-term treasury yields near zero, while yields on other fixed-income bonds recovered to pre-pandemic levels. With such low-yield returns offering investors, investors tend to turn to riskier assets such as equities.