E Tesla Doesn't Belong In This Group

In 2020 for the first time in history, a company made it to the $1 trillion market capitalization. This company was Apple, which has been vying for the top spot against Amazon and Microsoft since. This past decade has seen exceptional growth in the United States stock market. With any growth period, there are always companies that get caught up in the hype. It seems that Tesla (TSLA) is one of those companies. Tesla is now the 11th largest company by market capitalization amongst companies like Apple, Alphabet, Amazon, Visa, Berkshire Hathaway, and Walmart.

The Market Cap List

The list of the top eleven U.S. companies by market cap is as such:

  1. Apple $1.892 trillion (AAPL)
  2. Microsoft $1.537 trillion (MSFT)
  3. Amazon $1.529 trillion (AMZN)
  4. Alphabet $985 billion (GOOGL) (GOOG)
  5. Facebook $715 billion (FB)
  6. Berkshire Hathaway $500 billion (BRK-A) (BRK-B)
  7. Visa $421 billion (V)
  8. Walmart $389 billion (WMT)
  9. Johnson & Johnson $375 billion (JNJ)
  10. Procter & Gamble $339 billion (PG)
  11. Tesla $339 billion (TSLA)

Therefore Tesla is amongst giants that have been around for decades. To note is that Tesla's valuation closer to companies six through ten than the first five, as the first five have a market cap at least double Tesla's.

Tesla Lacks Where The Other Companies Excel

What separates Tesla from these other companies? It is the fact that all of the other companies have very stable core businesses supplemented by high growth side businesses. Alphabet, for example, has grown to be very successful based on Google Search & advertising then purchased YouTube. Now Alphabet is using that core base business to power innovation and growth through "other bets". The ability to use capital from a very established business has afforded Alphabet to focus on high growth opportunities like autonomous vehicles. This same attribute applies to Apple with iPhones and Services, Amazon with Amazon Marketplace and AWS, & Microsoft with Windows/Office Suite and Azure Cloud.

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 I/we have no positions in any stocks mentioned, but may initiate a long position in TSLA over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not ...

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Moon Kil Woong 4 weeks ago Contributor's comment

Tesla certainly fails in profitability, yet even worse is it's cash flows. Unless someone is willing to fund them regularly they will be out of business. I like what they are doing but really, does it need to spend loads of money making equipment to shrink production lines when it just spent billions making giant factories and does it need to buy land to mine when they can buy what they need on the open market cheaper?

Dick Kaplan 4 weeks ago Member's comment

One area #Tesla excels, and which should not be discounted, is customer loyalty.

Craig Newman 4 weeks ago Member's comment

$TSLA has long been overrated. The financials simply don't match up.

Moon Kil Woong 4 weeks ago Contributor's comment

I like Tesla cars, however, their reviews by customers are nothing to jump up and down about. That said, the reviews of the cars themselves are more impressive. I actually think their auto drive feature is a crown jewel for Tesla cars more than anything else.