Tesla just joined an exclusive club of 1+ trillion Dollar companies in the US, a feat that took roughly 11 years since its debut in 2010. There’s no doubt about Tesla’s success. After all, they are popular, reliable, and highly demanded cars that are led by a very smart individual and influencer, Elon Musk.
Tesla’s stock rallied higher on Monday, fueled by a multitude of reasons including better Q3 earnings, the model 3 being labeled as the top selling car in Europe and a massive order by the giant of car rentals, Hertz Global Holdings Inc. According to analysts, the global shift towards electric cars meant that traders already had plenty of reasons to be invested in Tesla yet a catalyst was needed to take the stock out of its lull. This is exactly what happened yesterday as the stock pushed into new all-time highs.
Nonetheless, it’s not all rainbows and butterflies as competition ramps up. Nearly every global carmaker is producing electric vehicles yet there’s no denying the quality of execution that Tesla has kept in place and is known for among its customers.
On the one hand, some analysts are seeing Tesla as highly overvalued and trading above where it should be with the assumption that its success will reign over the next few years while others will not be able to compete. On the other hand, bullish investors and analysts view Tesla as a technology company and one that is reshaping the world. To them, it’s more than just electric cars but a vision that could improve our lives and futures.
Whatever the case is, Tesla is part of a trillion Dollar club that includes Apple, Amazon, Alphabet, and Microsoft, which, weirdly enough, are all tech companies and work well in categorizing Tesla as part of the tech group.
It’s worth noting that Tesla currently trades around 178 times its estimated 2021 earnings compared to FAANG stocks trading around 43 times their estimated 2021 earnings.
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