Tesla Inc.’s stock market crash has made it one of America’s most valuable companies. But in some key ways, the electric car maker is very different from other companies of its size.
Shares of Tesla have soared more than 300% in the last year, raising the company’s market capitalization above $ 800 billion before backing down. The company’s valuation as of Thursday was higher than that of the next seven largest automakers combined, putting the company shoulder to shoulder with the market giants: Apple Inc., Microsoft Corp., Amazon.com Inc., Google’s parent, Alphabet Inc. and Facebook. Inc.
Here’s how Tesla got here and how its bow compares to other companies on the S&P 500:
It became extremely valuable, fast
At 244 days, the time it took for Tesla’s market value to grow from $ 100 billion to $ 800 billion significantly outpaced its peers. The 17-year-old company has benefited enormously from investors embracing CEO Elon Musk’s vision for electric vehicles and his idea that Tesla is not just a carmaker, but a technology company. Optimism about the transition to electric vehicles has driven record gains in shares of electric vehicle and battery manufacturers over the past year.
Stocks from the Federal Reserve have helped drive more investors into stocks and major indices. The central bank cut interest rates and bought billions of dollars in bonds, causing long-term Treasury yields to approach zero, while yields on other fixed income securities recovered to pre-pandemic levels. With the low yields offered by bonds, investors tend to turn to riskier assets, such as stocks.