Elon Musk may have reclaimed the crown as the richest person. But shares of his best-known company, Tesla, have a long way to go to return to the $1 trillion value club in the S&P 500.
Just three S&P 500 companies, including Apple, Microsoft and Alphabet, are still worth $1 trillion or more. Tesla at a market value of $641.6 billion isn't even close — and would need to see its value vault more than 56% to hit $1 trillion again.
And that's a tough hurdle for Tesla to overcome. "Without a major Tesla announcement, will any of the expected topics to be discussed really drive the stock higher?" said Greg Bassuk, CEO of AXS Investments. AXS offers investments that allow investors to profit when Tesla's stock falls.
Tesla's Rally Not Enough To Put It Back At A Trillion
Shares of Tesla are mounting an impressive rally this year. Just this year the stock is up 65% to 202.77. That's the biggest percentage rally this year among the top 10 most valuable S&P 500 stocks.
But that quick gain is just a trickle charge for Tesla investors. Keep in mind this stock was worth 384.29 a share at its highest point in the past 52 weeks on April 4, 2022. That's more than 90% higher than it is now, even after the rally.
And that means Tesla ranks just as the sixth most-valuable stock in the S&P 500, trailing Berkshire Hathaway at $681.9 billion, Amazon.com and Alphabet, not to mention Microsoft and Apple.
Analysts, too, don't seem all that optimistic that Tesla will return to the trillion-dollar club anytime soon. Most estimate Tesla will only be worth 200.11 a share in 12 months' time. And if that's right, it would make the company worth just $633 billion.
Can Tesla Regain Its Stature In S&P 500?
S&P 500 investors forget how far Tesla has fallen. Not too long ago, it was still a trillion-dollar company
Back at the end of 2021, investors valued Tesla at $1.06 trillion. At that time, the company ranked No. 5 in terms of the most valuable companies in the S&P 500.
Now, though, all eyes are on whether Tesla can maintain growth amid heating up competition around the world. The answer looks like no this year. Tesla's adjusted profit per share is seen dropping nearly 3% in 2023.
But Tesla isn't trading at a nosebleed 56 P/E based just on 2023 results. It's all about 2024 and beyond. And here, analysts are more bullish. The company's adjusted profit per share is expected to rise 43% in 2024 and another 18% in 2025 to an ominous $6.66 a share.
At some point, maybe Tesla's stock can rejoin its $1 trillion counterparts.
Most Valuable S&P 500 Companies
| Company | Ticker | YTD % | Market value ($ trillions) | Sector |
|---|---|---|---|---|
| Apple | 11.8% | $2.3 | Information Technology | |
| Microsoft | 2.7 | $1.8 | Information Technology | |
| Alphabet | 2.4 | 1.2 | Communication Services | |
| Amazon.com | 9.7 | 0.9 | Consumer Discretionary | |
| Berkshire Hathaway | -1.3 | 0.7 | Financials | |
| Tesla | 64.6 | 0.6 | Consumer Discretionary | |
| Nvidia | 55.3 | 0.5 | Information Technology | |
| Exxon Mobil | 0.5 | 0.4 | Energy | |
| Meta Platforms | 44.1 | 0.4 | Information Technology | |
| Visa | 5.1 | 0.4 | Information Technology |
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
