Investor's Corner
Tesla’s (TSLA) massive valuation could make S&P 500 inclusion complicated
Tesla (NASDAQ: TSLA) is set to join the S&P 500 on December 21st, making it one of the newest members of the world’s most influential stock index. However, Tesla’s gigantic market capitalization, which has made it the most valuable car company globally, could make the inclusion process slightly more complicated than initially planned.
Tesla’s over $423 billion market cap will make it the largest company ever to be added to the S&P 500 Index. Putting the entire company into the new benchmark would force index-tracking funds to sell upwards of $40 billion in stock to make room for the electric car company. Because of this, the S&P’s overseer and consultant, the S&P Dow Jones Indices, is considering the option of adding Tesla to the index in phases or tranches.
After being snubbed from the index in early September, Tesla is finally getting its shot to join the S&P. But while the company is experiencing an over 400% growth in share price so far this year, adding Tesla in more than one phase seems to be the more favorable scenario. However, the S&P Dow Jones Indices will seek out feedback from investors, questioning them on which strategy is more appealing to them: adding TSLA all at once or in several chunks. It is unknown which companies will be replaced by Tesla, but the S&P plans to name them later.
Howard Silverblatt, a Senior Index Analyst at S&P Dow Jones, stated that the decision to add the electric automaker wasn’t a simple one, especially considering the magnitude of Tesla’s inclusion. “It wasn’t easy to make such an important decision, and this decision has a big impact,” he said. Silverblatt added that getting insight from investors will assist in the decision-making process.
“An open-ended dialog with investors will only help. You can’t put a company in at such a high level just like you would any other firm. The times have changed, the magnitude of the stocks that are being added has changed, too,” he added.
Tesla will end up likely being one of the top 10 largest stocks in the S&P when it joins the index on December 21st, Bloomberg reported. Estimating that it will fall in between Johnson & Johnson and Procter & Gamble Co., Tesla’s valuation would be the equivalent of the 60 smallest stocks in the benchmark. However, S&P Dow Jones uses a float-adjusted market-cap to determine the weight instead of the straight figure.
When the S&P 500 is reshuffled, which happens on a quarterly basis to rebalance the index, changes occur due to fluctuations in a company’s size. Depending on growth or a reduction of size, some stocks may move from the S&P’s small-cap index to the large-cap, or vice versa.
In Tesla’s circumstance, no company that will be removed is large enough to offset the automaker’s inclusion into the S&P 500. This is why the index’s overseer is considering adding the company in more than one tranche.
Lawrence Creatura, a portfolio manager at PRSPCTV Capital LLC, told Bloomberg that this is effectively “trading a pawn on the chessboard for a queen.”
“The size of Tesla as it’s being included in the index is much larger relative to the company that is likely to come out. That’s going to create a lot of shuffling among passive funds that track the S&P 500 explicitly,” Creatura also said.
On the news that TSLA would join the S&P on Monday evening, shares of the automaker’s stock spiked over 13% in after-hours trading. At the time of writing, TSLA shares were trading at $444.10, up over 9%.
After finally attaining the four consecutive profitable quarter threshold required to join the index, Tesla is riding a strong stream of momentum heading into the end of 2020. In its most successful year as a company yet, Tesla plans to close out 2020 with a bang by accomplishing its 500,000 vehicle delivery mark, which was set at the beginning of the year before the COVID-19 pandemic began. With increased production and growing demand, Tesla could reach a one million car a year production and delivery rate, surging the popularity and adoption of electric cars and phasing out the use of petrol-powered engines.
Disclaimer: Joey Klender is a TSLA Shareholder.
Tesla deliveries got a big boost in expectations from Wall Street firm Goldman Sachs, who believes the company will report some stronger-than-expected numbers when the second quarter comes to an end in the coming weeks.
Goldman Sachs has raised its vehicle delivery forecast for Tesla (NASDAQ: TSLA) in the second quarter of 2026, signaling growing confidence in the electric vehicle leader’s near-term momentum despite mixed market signals. Analyst Mark Delaney lifted the bank’s Q2 estimate to 420,000 units from a previous 405,000, surpassing the Visible Alpha consensus estimate of 400,000.
The upward revision stems from stronger-than-expected sales data across key regions. Europe stands out with projected year-over-year growth of 85-90 percent, driven by robust demand for Tesla’s Model Y and refreshed offerings. China posted high single-digit gains, while markets like South Korea and Australia also contributed positive momentum. These gains help offset mid-teens declines in U.S. deliveries through May, where broader EV market headwinds and competition persist.
Goldman extended its optimism to the full year, increasing its 2026 delivery projection to 1.73 million vehicles from 1.72 million. Longer-term forecasts remain unchanged, with 1.88 million units expected in 2027 and 1.96 million in 2028. The bank also nudged its 2026 earnings-per-share estimate higher to $1.35 from $1.30, reflecting anticipated margin benefits from higher volumes and operational efficiencies.
Despite these positive adjustments, Goldman maintained its Neutral rating and $375 price target on Tesla shares. At current trading levels near $411, the stock sits about 8-9 percent above the target, highlighting ongoing valuation concerns even as delivery momentum builds. Tesla’s Q1 2026 deliveries totaled 358,023 units, setting a baseline for recovery expectations in the current period.
This update arrives as Tesla prepares to report official Q2 figures shortly after June 30. Investors and analysts will closely watch not only headline delivery numbers but also regional breakdowns, average selling prices, and progress on energy storage deployments and autonomous technology initiatives.
The move by Goldman Sachs underscores a broader narrative for Tesla: while legacy auto markets face softening demand and tariff uncertainties, Tesla’s global footprint and product pipeline provide resilience. Europe’s surge reflects pent-up demand and policy support for EVs, while China’s steady growth highlights Tesla’s competitive positioning against local rivals.
Tesla still has its work cut out for it, including U.S. price sensitivity and intensifying competition. Yet Goldman’s revision adds to a series of analyst notes suggesting Q2 could mark a turning point. As Tesla pushes toward higher production rates at facilities in Fremont, Shanghai, and Berlin, sustained execution will be key to validating these higher forecasts.
We have said numerous times that deliveries are becoming a less important metric in the grand scheme of things, as AI truly takes precedence in the company’s thesis.
For Tesla bulls, the Goldman note reinforces faith in underlying demand trends. For skeptics, the unchanged rating serves as a reminder that delivery beats alone may not immediately resolve valuation debates in a high-interest-rate environment. Tesla’s stock reaction will likely hinge on the official numbers and management commentary in the coming weeks.
Renowned investor Ron Baron, founder and CEO of Baron Capital, has once again demonstrated his unwavering faith in Elon Musk’s ventures.
Just after SpaceX’s record-breaking IPO, Baron announced he purchased an additional $1 billion in SpaceX (NASDAQ: SPCX) shares. This move pushes Baron Capital’s total holdings in the company to a staggering $25 billion in market value, underscoring one of the most successful private-to-public investment stories in recent history.
Baron’s relationship with SpaceX dates back to 2017, when his firm began investing approximately $1.75–2 billion through secondary markets and employee tender offers at valuations around $20–22 billion.
By the time of the IPO, which valued SpaceX at over $2 trillion with shares closing near $161, those early stakes had generated more than $13 billion in unrealized gains. Post-IPO, Baron’s position ballooned further, reflecting the company’s meteoric rise driven by reusable rocketry, Starlink’s global satellite internet constellation, Starshield defense applications, and ambitious plans for orbital infrastructure.
In a recent interview, Baron articulated his bullish outlook with characteristic enthusiasm.
Ron Baron said today that he bought $1 billion of @SpaceX IPO shares last Friday, and said that all of Baron Capital’s $SPCX holdings are now worth $25 billion.
“I think we’re going to make hundreds of billions of dollars; If you read the prospectus, you realize what they… pic.twitter.com/U8F471KtJS
— Sawyer Merritt (@SawyerMerritt) June 15, 2026
“I think we’re going to make hundreds of billions of dollars,” he stated, emphasizing that SpaceX’s achievements in rocketry and satellite technology are “not possible for anyone else to accomplish.” He envisions the company as a cornerstone of humanity’s multi-planetary future, potentially reaching valuations of $10–30 trillion within 10–15 years.
Baron has repeatedly affirmed he has no plans to sell, viewing SpaceX as a “lifetime investment” alongside Tesla.
Tesla bull Ron Baron reveals $100M SpaceX investment, sees 3-5x return on TSLA
This conviction stems from SpaceX’s unparalleled execution. The company has revolutionized access to space with Falcon 9 reusability, deployed thousands of Starlink satellites, and is advancing Starship for Mars missions and point-to-point Earth transport.
Baron highlights emerging opportunities like space-based AI data centers and direct-to-cell satellite connectivity, positioning SpaceX at the forefront of a new space economy projected to generate trillions in value.
Critics may question the lofty projections amid high valuations and execution risks, but Baron’s track record speaks volumes. His Tesla holdings, initiated in the mid-2010s, have also delivered outsized returns. As one of the largest institutional holders of SpaceX pre-IPO, Baron Capital’s funds, such as Baron Partners, benefited immensely from valuation markups.
Baron’s $1 billion IPO purchase signals deep confidence in SpaceX’s post-IPO trajectory. In an era of short-term market noise, his strategy exemplifies patient capital: backing visionary leadership and transformative technology.
For investors watching the space sector, it serves as a powerful endorsement that the final frontier may indeed yield the next great wealth-creation engine. As Baron puts it, SpaceX isn’t just building rockets—it’s trying to “save humanity” by expanding our horizons beyond Earth.
Elon Musk
SpaceX (SPCX) IPO is live today at $135: Here’s exactly what you need to know
SpaceX priced its historic IPO at $135 per share today, raising a record $75 billion.
SpaceX officially priced its initial public offering at $135 per share, offering 555,555,555 shares of Class A common stock and raising $75 billion in what is the largest IPO in stock market history. Shares are set to begin trading on the Nasdaq Global Select Market on Friday, June 12, under the ticker symbol SPCX. The previous record holder was Saudi Aramco’s 2019 offering at $29 billion, followed by Alibaba’s $22 billion offering in 2014.
At $135 per share and roughly 555.6 million shares, the implied valuation sits near $1.75 trillion, which would make SpaceX roughly the seventh largest company in the United States, just above Tesla’s current market cap. Regular investors can request shares at the IPO price through Robinhood, Fidelity, Charles Schwab, SoFi, and E*TRADE, though the deal is heavily oversubscribed and most retail allocations will be partial or unfilled. Once trading opens June 12, anyone with a brokerage account can buy SPCX on the open market.
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The valuation is anchored primarily by Starlink. Starlink crossed 10 million subscribers as of February 2026 and is adding 750,000 to 1.5 million new users per month, with the connectivity segment already posting a $1.19 billion profit last quarter. The offering also bundles in xAI following SpaceX’s all-stock merger earlier this year, adding Grok and the Colossus supercomputer to the investment thesis. As Teslarati reported, Starlink ended 2025 with $10 billion in revenue, a figure analysts project could reach $24 billion by end of 2026.
Wedbush analyst Dan Ives has been vocal in his support. “I think the time is right,” Ives said, adding that the offering expands the Elon Musk ecosystem rather than competing with Tesla. An average 12-month price target of $165 per share represents roughly 22% upside from the IPO price. Not everyone agrees – Motley Fool noted xAI is spending $1 billion per month playing catch-up to OpenAI and Anthropic.
Musk founded SpaceX in 2002 with a single stated purpose. “Elon founded SpaceX with a goal to change humanity, to make us a multi-planet species,” CFO Bret Johnsen said in the company’s retail roadshow video this week. Musk himself has been more direct: “We are building the systems and technologies necessary to provide global connectivity on Earth and beyond, to understand the true nature of the universe, and to extend the light of consciousness to the stars.”
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