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  1. Cute. Now look at all other automobile manufacturers’ market cap and compare to Tesla.

    Tell me if any of that makes sense.

  2. Comparing revenue to revenue across industries is silly. Saying they make 10% of what meta does is giving too much credit to Tesla

    Better to compare their net income

    600m vs 18b

    30x more profit.

  3. justadudeinchicago on

    Obviously stocks have hype and that certainly contributes here. That said, a stock price is generally defined as an annuity on future earnings.

    So two stocks are identical from a hype perspective, the one with higher earnings over the long run, not just today, should be higher.

    I’m not trying to explain why Tesla is so hyped or whether the calculation is right, but most finance types think in the terms described above

  4. Because investment value (which is what stock price and market cap are tied to) is about long term expected value. You can argue that Tesla’s long term prospects are inflated, but not so much beyond Meta’s.

  5. safe-viewing on

    The value of a company is not strictly profit.

    There are other factors in why investors want to invest or not invest in different companies – driving share price and market cap up or down.

  6. Tesla stock value diverged from its fundamentals and entered meme stock territory a while back. Trade it based on twitter sentiment, and don’t expect rationality.

  7. Entirely based on the cult of personality surrounding Elon Musk. There is no rational reason for it.

  8. deepfriedbits on

    Mostly because Tesla’s CEO has been effective at selling the company’s vision to investors (“FSD launched any day now bro” for a decade).

    The good news for pragmatists is that his spell is weakening.

  9. VirtualArmsDealer on

    Meme stocks. Fomo people buy them, they pump. Institutions sell. Moves money from idiots to hedge funds. Classic dumb money move. Avoid all memstocks long term.

  10. Isn’t it always about perception anyways? People look at a trajectory and disregard real world considerations.

    Nvidia vs Apple for example? Apple makes significantly more, but Nvidia keeps growing their profits where apple keeps declining.

  11. TSLA stock should be like $50 maybe even lower if this was a market based on fundamentals. But I guess people think they will have the first robots building civilization on Mars or something.

  12. CaptainHistorical583 on

    Because efficient and rational markets or something to that effect. I dunno my econ degree didn’t include a study on memes.

  13. So I hate to be annoying here, but the cost of revenue of an auto manufacturer is always going to be way way higher than a tech company like Meta because of what they’re selling.

    That said, I’m not disagreeing with your concept that Tesla stock is just so so unbelievably overvalued. I have no idea how speculation on that has gotten so completely out of control that the stock price has gotten as stupid high as it is. I just think the analysis should also include a comparison to a more traditional auto manufacturer, in addition to a modern high-tech company like meta, to take into account the fundamental business sector differences.

    Cool data! Thanks!

  14. allmysportsteamssuck on

    Elon is a master at hype, which he has to do to continue conning gullible investors into pumping up the value of his companies so he can continue his “buy, borrow, die” grift.

  15. There two main rationalization, 1. Is tesla is a glorified meme stock being held up by a bunch of retail traders who belive it will 10x randomly. 2. Is people are putting alot of its valuation on the future of tesla with robo taxis, robots, and full self driving. The main upside they see if that tesla tech for self driving is much cheaper to implement than waymo for instance so if they can master self driving with only cameras they’ll make bank. But whether or not tesla will fulfill any of there promises is a pure luck

  16. electricshadows4 on

    Tesla’s market cap reflects a (very speculative) bet on its potential to generate future revenue beyond just selling cars. Just like how Google evolved far beyond search, Amazon beyond books, and Netflix beyond DVD rentals, a lot of people see Tesla as more than an automaker. While traditional car companies will probably remain primarily in the automotive business, Tesla is positioned to profit from a broader ecosystem—autonomous driving software, energy storage, AI systems, and robotics. That doesn’t necessarily mean its valuation is justified, but it explains why comparing Tesla to legacy car manufacturers isn’t exactly an apples-to-apples comparison.

  17. You can’t compare incomes and hold them against two completely different markets. What the fuck is this post?

  18. The fact that crypto currencies also have “market caps” and most don’t have any earnings, tells us that investors buy things based on predicted future asset value increases rather than current abilities to generate a profit.

  19. Because market cap is a meaningless value that people think is related to the company’s size or value. And it’s not.

  20. Long time ago the stock market became closer to a Casino. Some stocks are inflated because people are betting on them even if their results are underwhelming