On Monday, Tesla shares rose 6 percent, approaching a market value of $500 billion and extending gains to 27 percent since the news a week ago that the electric car manufacturer will debut in December in the S&P 500, forcing index funds to buy billions of dollars of its stock.
Tesla has been by far the world’s most valuable automaker, up over 500 percent in 2020, considering production that is a fraction of Toyota, Volkswagen or General Motors.
Graphic: Tesla in the S&P 500: in a large pond, small income,
Tesla is currently five times more expensive than GM and Ford together and after Wedbush analyst Daniel Ives bumped his price goal to $560 from $500, the next raise in the shares of the Silicon Valley automaker arrived.
Though retaining his neutral ranking, Ives also said that in a “Bull Case” the stock could reach $1,000, suggesting steeper demand for electric vehicles in coming years.
However, analysts tracking the company have a median price target of $385, around 26 percent below the $519 it reached on Monday, suggesting a perception by those on Wall Street that the shares of Tesla have been overvalued.
Index funds aiming to match the success of the S&P 500 would have to buy more than $50 billion of Tesla’s stock before its inclusion on Dec. 21, and Goldman Sachs predicted last week that another $8 billion will be bought by actively management mutual funds.
Now worth $491 billion, Tesla is the seventh most valued firm on Wall Street, just behind Berkshire Hathaway and just ahead of Visa, data from Refinitiv reveals.