Tesla stock price rally places it in the trillion-dollar club

A trillion reasons why Tesla shareholders are happy today…

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It was a historic moment overnight in the United States, as the Tesla Inc (NASDAQ: TSLA) stock price sailed across the US$1,000 mark. In the process, the electric vehicle (EV) maker has eclipsed the illustrious trillion-dollar club market capitalisation.

Following a deluge of broker updates and positive catalysts, Tesla is now a part of a distinguished group that is limited to a select few. The EV company joins the likes of other trillion-dollar companies including Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), and Amazon.com Inc (NASDAQ: AMZN).

Let’s take a look at what might have helped get Tesla fly past the trillion-dollar checkered flag.

Hertz so good

A contributing factor to the Tesla euphoria expressed overnight is Hertz move to make an initial order of 100,000 Teslas by the end of 2022. The car rental company shared the news in a press release last night — revealing its ambitions to offer the largest EV rental fleet in the United States, and one of the largest in the world. The choice to go with a Tesla fleet over other EV alternatives likely assisted the Tesla stock price overnight.

Commenting on this decision, Hertz interim CEO Mark Fields stated:

Electric vehicles are now mainstream, and we’ve only just begun to see rising global demand and interest. The new Hertz is going to lead the way as a mobility company, starting with the largest EV rental fleet in North America and a commitment to grow our EV fleet and provide the best rental and recharging experience for leisure and business customers around the world.

According to the release, by early November customers will be able to rent a Tesla Model 3 from Hertz. These will be made available across Hertz airport and neighbourhood locations in major markets across the US and some European cities.

The Hertz fleet will be comprised of more than 20% of EVs based on the initial 100,000 vehicle order. Additionally, Hertz 100,000 order will go a long way towards helping Tesla surpass 1 million vehicle deliveries in 2022.

Analysts lifting Tesla stock price targets

The Tesla share price ascension accelerated following the release of its third-quarter results. These results beat both revenue and earnings expectations.

In Q3, the company achieved US$13.76 billion in revenue and US$1.86 of earnings per share (EPS). This represented an increase of 57% and 145% respectively year-over-year. Hence, a handful of analysts had to go back to the drawing board and revise their Tesla stock price targets.

For instance, analysts at Morgan Stanley have now revised their price target to US$1,200. That is an upgrade of US$300 from the analysts’ prior target of US$900.

Likewise, analysts at Wedbush refined their target to US$1,100 from US$1,000. The team of Dan Ives and John Katsingris anticipate a “green tidal wave” for 2022.

Finally, the Tesla share price is up more than 143% over the past 12 months. Whereas, the S&P 500 Index is up 34.3% during the same timeframe.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Mitchell Lawler owns shares of Apple and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Amazon, Apple, Microsoft, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Amazon and Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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