Tesla Set To Become A Top 10 Company In The S&P 500

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Tesla Set to Become a Top 10 Company in the S&P 500

  • With positive earnings in each of the last four quarters, Tesla is now eligible to join the S&P 500. They will be the 8th largest company on the benchmark index, with a market cap of $544 billion
  • Tesla’s inclusion in the S&P 500 will commence in December of this year—an additional blow to Tesla bears as the index brings with it an additional layer of prestige

The New Kid On The Block

Tesla will be joining the S&P 500 in December, gaining eligibility for inclusion after posting positive earnings over four consecutive quarters.

In Q3’20, the company made $331 million in profits and delivered 139,300 vehicles. The stock has been on a tear in recent years, and joining the index only furthers the automaker’s momentum – dealing another blow to the increasingly hopeless short sellers along the way.

Company Market Cap TTM Earnings
Apple $1,971B $55B
Microsoft $1,617B $44B
Amazon $1,569B $11B
Alphabet $1,193B $34B
Facebook $785B $18B
Berkshire Hathaway $547B $81B
Tesla $544B $0.5B
Walmart $430B $14B
Visa $411B $10B
Johnson & Johnson $377B $34B

Anything But Standard

Standard & Poor’s have quite the criteria before a company can be considered for inclusion in their flagship index. To be part of the S&P 500, a minimum market cap of $8.2 billion is required.

Of course, market cap is not where Tesla’s weakness is. Valued at $544 billion, right off the bat they will be one of the top S&P 500 companies. Rather, net income has been the struggle for Tesla. After government subsidies, they posted $556 million in trailing twelve-month (TTM) profits, placing them 357th in the index.

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William K. 1 month ago Member's comment

The top ten, or even the top 20, may be giants but not really representative of anything other than giants. Of course, everybody can see the giants.