Should I Buy Tesla Stock Now?
Here's what you have to believe to justify the eye-popping value that the market is placing on the company's stock.
Tesla's (TSLA) stock price surged an astounding 743% in 2020, a growth rate that would have put many dot-com stocks to shame during the tech bubble in the late 1990s. Although the stock briefly dipped at the end of January 2021, the price has risen another 24% thus far this year.
The value the market is placing on Tesla is eye-popping. At the current stock price, the market value of its equity is $825 billion, making Tesla the sixth-largest company by equity market capitalization in the Morningstar US Market Index. At its current market cap, Tesla's equity is 8 times more valuable than the world's largest auto manufacturer, Volkswagen (VOW3), and approximately 7 times the combined equity valuation of both General Motors (GM) and Ford (F). Over the course of 2020, Tesla's equity market cap increased by almost $600 billion, which is greater than the total equity market cap of Warren Buffett's Berkshire Hathaway (BRK.B).
David Sekera does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.