This week Tesla joined a very exclusive club: companies with a market capitalization of at least one trillion dollars.
Tesla joins other tech heavyweights like Apple, Microsoft, Amazon and Google as well as Saudi Aramco (Saudi oil company, not charted) in the club. Facebook is now an ex-member, as its market capitalization has just dipped below the threshold in the last few weeks.
Show me where it Hertz
The tipping point for Tesla came from a deal struck with rental car company Hertz — which ordered 100,000 Tesla cars for its fleet. That's the largest order of electric vehicles ever, and is quite remarkable considering that Hertz filed for bankruptcy in May 2020.At $40k a pop, the 100,000 cars ordered are likely to be worth about $4bn or so in revenue to Tesla, but the news added closer to 25x that amount in market cap, pushing Tesla's equity value over the 13-digit mark. That's more than the next nine public automakers **combined.**
The old guard
Tesla investors are waiting, and hoping, that the company's early lead in electric vehicles will one day turn into earnings like its mega-tech peers Microsoft and Google — both of which reported results yesterday. For those companies, the future may be bright, but the present is pretty sunny as well.
Microsoft announced $45bn in revenue and $20bn in operating profit. Alphabet (Google parent co.) went one better and served up $65bn in revenue with $21bn of operating profit. Those numbers are just for the last quarter (3 months worth).Combined the two grew their revenue 33% relative to last year. For companies of their size, that kind of growth is really only fitting of one adjective. Unprecedented.
