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Tesla (TSLA) is leaving the current S&P 500 index’s performance in the dust

(Credit: Tesla)

Thanks to a profitable second quarter, expectations are high that Tesla stock (NASDAQ:TSLA) will be joining the S&P 500 index. Considering the current performance of the S&P 500, it appears that the addition of Tesla would actually benefit the index, since the electric car maker has all but left it in the dust in previous months. 

Tesla’s market cap of about $277 billion makes it a key part of Bloomberg’s U.S. Large Cap Index, or B500. The B500 is comprised of the 500 most highly capitalized companies in the United States. As noted by Bloomberg, 75 of the companies in the B500 are not in the S&P 500, and arguably among the most notable of them are Tesla, Uber, and Blackstone. 

Partly due to the inclusion of Tesla, the B500 has notably outperformed the S&P 500 this year. The 75 non-S&P 500 stocks in the B500 have so far shown an average gain of 20.8% (17.6% if TSLA is not included). With Tesla being bigger than 491 of the S&P 500’s members and over 0.8% of the B500’s entire market cap, it appears safe to assume that TSLA stock has driven the majority of the performance differential. 

Tesla has exhibited strength in its electric vehicle business this year, with its sales only declining about 5% year-over-year in the second quarter, far less than its counterparts from legacy auto. Apart from this, Tesla Energy, which has long been dormant partly due to the company’s focus on its electric car business, has also started picking up, with the Megapack being profitable and Solar Roof installations spreading across the United States. 

Beyond these, other aspects of Tesla’s ecosystem have also started picking up steam. Quite surprisingly, it appears that Tesla Arcade’s presence in China is showing some potential. Chinese internet giant Tencent recently reported its Q2 2020 earnings, for example, and it showed that the company’s online games segment is showing strength. Quite interestingly, part of this strength is due to Tencent’s partnership with Tesla. 

Tencent’s Peacekeeper Elite, a mobile title, recently launched some Tesla skins for players’ vehicles, and they proved to be quite successful. In its second-quarter report, Tencent noted that the Tesla skins in the online game were among the “highly popular” items in its recent report. Ultimately, the partnership between Tesla and Tencent is a win for both companies, as noted by The Motley Fool

As of writing, Tesla stock is trading 4.80% at $1,629.34. 

Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.

Tesla (TSLA) is leaving the current S&P 500 index’s performance in the dust
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