Remember when Tesla Inc.’s market value surpassed General Motors Co.? That was just in October, though investors can’t be blamed for thinking it was a lifetime ago.
The electric vehicle maker’s valuation has added the combined value of the Big Three – GM, Ford Motor Co. and Fiat Chrysler – in just five trading days through Monday. Tesla has grown by an average $14 billion on each of those days.
Tesla shares have been on a searing rally this year, recovering spectacularly from a steep pandemic-related sell-off, helped most recently by second-quarter delivery numbers that surpassed market estimates. In the past week, the company has roughly gained the value of Fiat Chrysler Automobiles N.V. every single day
While skeptics have said the stock’s current pace may be getting detached from reality and is instead being fueled by the “power of the narrative,” many believers abound.
“There is definitely a significant retail component that is driving shares higher,” Wedbush Securities analyst Daniel Ives said in an interview, referring to individual investors trading on platforms such as Robinhood.
Still, a lot of big institutional investors now also want a piece of Tesla and the electric vehicle market, he said. “In a Covid-19 pandemic and a dark macro environment, the company just put up a 90,000 delivery number, especially when other automakers are seeing herculean challenges.”