Tesla Surpasses $1 Trillion Market Value

Tesla Surpasses $1 Trillion Market Valuation

On Monday, Tesla achieved a significant financial milestone, exceeding a market valuation of $1 trillion. This accomplishment occurred 11 years following the company’s initial public offering.

Joining an Exclusive Group

Reaching this valuation places Tesla among a select group of companies, including Apple, Amazon, Facebook, and Google, all of which currently possess market capitalizations exceeding $1 trillion.

Share Price Surge

The $1 trillion mark was initially reached around midday on Monday when Tesla shares climbed to $998.22. The stock briefly fluctuated below $1,000 before ultimately surpassing it – a first for the automaker.

The day concluded with a 12.66% increase, closing at $1,024.86 per share. This marked the first instance of Tesla’s share price reaching the $1,000 threshold.

Catalysts for Growth

Several positive developments contributed to the surge in Tesla’s share price on Monday. A key factor was the announcement of a substantial order from Hertz.

Hertz, having recently emerged from bankruptcy proceedings, committed to purchasing 100,000 electric vehicles (EVs) from Tesla. This deal, valued at approximately $4.2 billion, will enable Hertz to offer EVs in 20% of its global fleet.

The Tesla Model 3 is anticipated to become available in Hertz’s rental inventory as early as next month, initially in major U.S. markets and select European cities.

Analyst Upgrades and Sales Data

Further bolstering investor confidence was a research note from Morgan Stanley analyst Adam Jonas. Jonas raised the firm’s price target for Tesla to $1,200, up from a previous target of $900, while maintaining an overweight rating.

Additionally, a report by JATO Dynamics revealed that the Tesla Model 3 was the best-selling vehicle in Europe last month. This represents the first time an all-electric vehicle has outsold vehicles with internal combustion engines, as reported by Reuters.

Strong Third Quarter Performance

This share price increase follows a strong third quarter for Tesla. The company reported a net income of $1.62 billion, a nearly fivefold increase compared to the $331 million earned during the same period last year.

Record sales drove this profit, despite ongoing challenges related to a global chip shortage and broader supply chain disruptions impacting the automotive industry.

Revenue Growth

Importantly, Tesla achieved this record net income even with the majority of its sales originating from its more affordable Model Y and Model 3 vehicles.

Third-quarter revenue reached $13.76 billion, a 56% increase from the $8.77 billion reported in the same quarter of the previous year. This revenue figure also represented a 15% increase compared to the $11.96 billion reported in the second quarter of 2021.

Historical Stock Performance

Tesla’s stock has historically experienced periods of volatility, sometimes influenced by statements from CEO Elon Musk. However, the stock has demonstrated a consistent upward trend over the past year, despite some intermittent declines.

One year prior, Tesla shares were trading at just over $420 per share.