Tesla Inc.’s stock-market tear has made it one of the most valuable U.S. companies. But in some key ways, the electric-car maker is very different from other companies its size.
Tesla’s shares have soared more than 300% in the last year, lifting the company’s market capitalization above $800 billion before retreating. The company’s valuation as of Thursday was larger than the next seven largest auto makers 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 a look at how Tesla got here, and how its arc compares to other companies in the S&P 500:
It became extremely valuable, fast
At 244 days, the time it took Tesla’s market value to grow from $100 billion to $800 billion significantly outpaced its peers. The 17-year old company has benefited greatly from investors embracing Chief Executive Officer Elon Musk’s vision of electric vehicles and his notion that Tesla isn’t just a car maker, but a technology company. Optimism about a transition to electric vehicles has fueled record gains in shares of EV and battery makers over the past year.
Actions by the Federal Reserve have helped push more investors into stocks and major indexes. The central bank cut interest rates and bought billions of dollars of bonds, sending long-term Treasury yields near zero while yields on other fixed-income securities recovered to pre-pandemic levels. With such low yields offered from bonds, investors tend to turn to riskier assets such as stocks.