Tesla’s wild stock surge is confounding common sense. Since crossing the $1,000 mark on June 10, the electric carmaker’s share price has soared another 70 percent in just a month, making it not only the world’s most valuable automobile company (despite selling significantly fewer cars than its similarly valued competitors), but also the 10th largest stock in the U.S., trailing tech giants like Apple, Amazon and Google.
On Friday, Tesla CEO Elon Musk’s net worth officially surpassed that of Warren Buffett, according to the Bloomberg Billionaires Index. And it’s still on the rise. On Monday, Tesla shares jumped 13 percent to a new record high of $1,773, trading at more than twice above its average Wall Street price target ($805) and three times higher than where it was at the beginning of 2020.
Why Does Tesla Stock Keep Surging?
New production plans, strong delivery numbers, analyst upgrade and talks of including Tesla in the S&P 500 index have all contributed to pushing its stock through the roof.
Last week, Tesla shares saw a strong two-day rally after the company reported better-than-expected delivery numbers for the second quarter, defying analysts’ worry that the coronavirus pandemic might have put a dent in EV sales. And as stock continues to climb and Tesla nears the date to report second-quarter earnings, talks have been going around that the company could be the latest addition to the S&P 500 index.
To be included in the S&P 500, companies have to earn an accounting profit for more than four quarters in a row. Tesla has reported three consecutive profitable quarters. We’ll know if the company has met the final requirement when it reports earnings on July 22.
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