On Monday, Tesla exceeded $1 trillion in market value after receiving its largest-ever order from rental car business Hertz, a deal that boosted the electric car pioneer’s ambitions to outsell the entire auto industry over the next decade.
Tesla is the fifth company in the country to have achieved this position, following Microsoft, Alphabet, Apple, and Amazon. So, to put things into perspective, Tesla has now officially made it to the Big Tech superpowers gang.
When Tesla’s stock hit $998.22 at midday on Monday, it crossed the $1 trillion market cap threshold. After that, share prices were locked just under $1,000 for a little time before soaring like a rocket.
Elon Musk, the CEO of Tesla, was also taken aback by the speed of the spike. “Strange that moved valuation, as Tesla is very much a production ramp problem, not a demand problem,” Musk tweeted in reply to a comment by Ross Gerber, co-founder of the investment fund Gerber Kawasaki and a Tesla shareholder.
“Wild $T1mes!” Musk wrote in a separate tweet.
Tesla’s stock is now trading at $1,024, an increase of 13% from its initial price. The company’s stock price has now reached $1,000 per share for the first time. The stock climbed considerably higher on Monday when several media reports surfaced, including Hertz’s purchase of 100,000 electric vehicles. The deal is worth $4.2 billion and will convert 20% of Hertz’s global rental fleet to all-electric vehicles.
Leading analyst, Adam Jones at Morgan Stanley, upped their target on Tesla to US$1,200 from US$894, pointing to the company’s “extraordinary” revenue in the last quarter despite supply chain problems. Musk’s company’s report from last week showed a net income of $1.62 billion in the third quarter of 2021, validating the rising share price. Despite a catastrophic global chip scarcity and severely constrained global supply chains, this profit margin was achieved, putting numerous industry giants in a bind.
Tesla made $13.76 billion in the third quarter, climbing 56% from the $8.77 billion reported in the same time in 2020, despite the great bulk of its sales coming from the automaker’s less costly Model 3 and Model Y vehicles.
However, this new achievement could become one of the company’s most significant milestones. Now the world might consider Elon Musk’s tech empire in the same way it thinks of Apple, Microsoft, Alphabet, and Jeff Bezos’ Amazon. Therefore, the company’s decisions will impact not just the economy but also the rest of the 21st century, defining the future.
This is a developing story that will be updated as more details become available.
