Tesla shares record best monthly rally since November

Tesla Inc. shares recorded their biggest monthly gain in almost a year to cap October with an all-time high market value.

Shares of the electric-vehicle maker surged 44% in October, their biggest monthly climb since November 2020. The stock closed up 3.4% in New York on Friday, the last trading day of the month.

Tesla kicked off October with a blockbuster deliveries report for the third quarter, followed by strong earnings for the period and the icing on the cake — an order of 100,000 vehicles from car-rental company Hertz Global Holdings Inc. 

While the shares were already on a strong streak for the past five months, these headlines supercharged them and took Tesla’s market valuation to over $1.1 trillion, amid stronger evidence that EVs are finally going mainstream. 

However, unlike its trillion-dollar peers, Tesla’s valuation touched that level before its revenue could reach the $50-billion mark.

Even though Tesla is the fifth-biggest company on the S&P 500 Index when ranked by market capitalization, it is in 89th place when ranked by last year’s annual revenue. It is preceded by Capital One Financial Corp. — which had $31.6 billion in revenue last year versus Tesla’s $31.5 billion and is valued at $75 billion. The company with the biggest revenue on the index is Walmart Inc. — a mammoth $559.2 billion that dwarfs its own valuation of about $417 billion.

Tesla shares’ substantial premium when compared to other technology firms at the time they crossed market valuation thresholds reflects greater investor enthusiasm for its technological dominance over peers, as well as an inflation of the S&P 500 Index’s market multiple, Morgan Stanley analyst Adam Jonas wrote in a note.

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