If the pre-market gains hold, Tesla's own value will top $440 billion, more than the S&P gained on Monday after news emerged of successful COVID-19 vaccine trial data from Moderna Inc.
The California-based automaker will join the broad-based market index on December 21, S&P Dow Jones Indices announced on Monday, prompting another wave of affection for Tesla stock. It will be a major operation as the electric vehicle manufacturer becomes one of the 10 largest companies in the index, ahead of bank JPMorgan Chase and consumer goods group Procter & Gamble.
"Potentially one of the pushbacks on adding Tesla to the S&P was the elevated stock price", Credit Suisse analyst Dan Levy wrote in a note.
A milestone for Tesla Tesla which has a market cap of $390 billion will officially join the benchmark index prior to trading on December 21, the S&P Dow Jones Indices said in a statement.
The addition of Tesla, one of the world's most compelling growth stories and one of the market's most active stocks, is likely to trigger around $50 billion in portfolio activity as active investors, as well as passive funds, make room for its $400 billion-plus market valuation and expected 1% weight for the index.
The brainchild of billionaire Space Karen Elon Musk, Tesla met the criteria to be included in the S&P 500 last September, but was snubbed and passed over by what's known as the "Index Committee" at S&P Dow Jones Indices until now.
S&P DJI said the addition of the auto company would require investment funds indexed to the S&P 500 to sell about $51 billion worth of shares of current member companies so that their portfolios correctly reflect the index.
But the addition of Tesla to the S&P 500 is clearly buoying investors now.
The company has been breaking its own records in the past year.
Total revenues climbed 39% to $8.77 billion dollars, exceeding the expected $8.36 billion.