Tesla continues to turn the tables on the auto industry and investors who doubted the company.
Elon Musk’s electric vehicle maker topped $526 billion in market value for the first time on Tuesday. It is now bigger than Toyota, General Motors and Ford, despite being a much younger company.
Part of the catalyst rocketing the shares higher is the forthcoming addition to the S&P 500 set for December 21.
Fund managers that mirror the weightings of the benchmark index, in some cases, likely need to add to their positions hence giving the stock momentum.
Tesla YTD Stock Action
Separately, Wall Street analysts are becoming more bullish on the company after it clocked several back-to-back quarters of profitability.
New Street Research managing partner Pierre Ferragu, recently told FOX Business, the automaker's gross margins, excluding regulatory credits, is the real story.
“Tesla’s gross margins are about 20%, it’s the leading gross margin for a car manufacturer, and it continues to expand,” he said. Last quarter, the automotive gross margin, ex. credits, was up 23.7% from 20.8% during the same period a year ago.
Tesla shares have advanced 563% this year, at the same time inflating Musk’s personal net worth to $126 billion, according to Forbes. That would make him the world’s third-richest person, bumping Microsoft co-found Bill Gates to the fourth slot at $119 billion.
Tesla’s milestone occurred in tandem with the Dow Jones Industrial Average hitting and closing above the 30,000 level for the first time and as the S&P 500 secured a new record high.