Investor's Corner
Tesla’s (TSLA) non-inclusion in the S&P 500 may soon be too awkward to continue
After Tesla (NASDAQ:TSLA) posted its fourth consecutive quarterly profit in the second quarter, speculations were abounding that the electric car maker was on its way to becoming included in the S&P 500. Alas, this was not the case, with the index adding Pool and Etsy instead of Tesla during its last two adjustments.
Considering that the electric car maker produced and delivered a record number of vehicles in the third quarter, expectations are high that the company may post another profit in the third quarter. Wall Street, for its part, expects Tesla to show a GAAP profit of $0.32 per share with $8.2 billion in sales. These expectations are quite optimistic, but they do seem feasible considering the company’s Q3 production and delivery figures.
If Tesla posts its fifth consecutive profitable quarter in Q3 2020, discussions about its potential inclusion into the S&P 500 would likely be rekindled. This is a scenario that could end up being quite awkward for the index. As explained by Wells Fargo analyst Christopher Harvey in a recent research note, if Tesla ends up profitable once more, it would be imperative for the S&P 500 to include the electric car maker. This is partly because Tesla’s non-inclusion in the S&P 500 is already adversely affecting the index’s overall performance.
It should be noted that even the S&P 500 has competition. And unfortunately for the index, it has been lagging behind one of its key competitors, the Russell 1000. The Russell 1000, which includes Tesla, has outperformed the S&P 500 over the past three years. This became even more evident this year, as the Russell 1000 is up 9.1% year-to-date while the S&P 500 is up 7.8%. Tesla, which is up 426% year-to-date and 739% over the past year, has contributed to the Russell 1000’s performance.
“Over the past three years, the Russell 1000 (+45.6%) has outpaced the S&P 500 (+44.6%). Notably, S&P uses a committee for index changes, introducing some subjectivity. On the other hand, R1000 changes involve little subjectivity: every June 30th Russell family rebalances its indices based on market cap,” the Wells Fargo analyst wrote.
In a way, Tesla’s non-inclusion into the S&P 500 has reached a point where it is already a bit odd, as the company is currently ranked as the world’s most valuable automaker. At its current market cap, Tesla would stand as the ninth-largest member of the S&P 500, just behind Walmart and ahead of Johnson & Johnson. Speculations are abounding about why the S&P has largely snubbed the EV maker, with critics arguing that it is due to Tesla’s profits being tied to its sale of regulatory credits. The S&P, for its part, has told Barron’s that it considers many factors when deciding which companies would be included in the index.
Disclosure: I am long TSLA.
Electric vehicle maker Lucid Group has denied rumors of an imminent bankruptcy after a report from this morning sent the stock on a dramatic drop on Wall Street, seeing losses of more than 40 percent during trading hours.
Lucid’s Director of Communications, Nick Twork, responded to the report from Eletric-Vehicles.com, which stated the company’s restructuring advisor, AlixPartners, was asked to review two decisions: taking Lucid shares private or filing for Chapter 11 bankruptcy protection.
The report also claims AlixPartners told the Lucid board to “concentrate on Gravity production while improving its quality, and to temporarily hold back the Lucid Air, the sedan that has defined the company since its launch.”
Twork said:
$LCID The rumors are completely false. The company has sufficient liquidity to carry its operations well into next year, as recently published in its last quarterly filings, and it has not formed any special Board committee to explore the scenarios reported today. Our focus is…
— Nick Twork (@ntwork) July 14, 2026
Shares rebounded after the response to the report, halving its losses as the trading day neared 3 p.m. Eastern.
Lucid has struggled to get its sales off the ground and into more respectable numbers, but the company is in its early years, when things are hard to begin with. It is also backed by several notable investors, including the Saudi Public Investment Fund (PIF), which has nearly limitless money and likely would not ditch an investment of this size so soon.
Lucid shares were down just 14 percent at the time of publication, a far cry from the 55 percent its losses topped out at during the day.
Tesla received a price target upgrade just on the heels of what was a crazy successful quarter for its automotive business, as the company reported a delivery beat of over 15 percent for Q2.
Jefferies analysts are upping Tesla’s price target (NASDAQ: TSLA) to $400 from $375, while maintaining their “Hold” rating on shares, and the strong automotive deliveries from Q2 is a big reason. However, there are some other catalysts that Jefferies believes position Tesla for a strong position in the second half of the year.
Strong Deliveries
Tesla reported 480,000 deliveries for Q2, while Wall Street was between 395,000 and 405,000, as an overall consensus. It was an incredibly strong quarter from a delivery perspective, and Tesla sold well more than it produced during the three months.
Tesla crushes Wall Street expectations, beats delivery estimates by over 15 percent
While vehicle deliveries are not necessarily looked at in the light that they used to be, Tesla still maintains a lot of advantages for keeping deliveries strong. With the loss of the $7,500 EV Tax Credit last year, Tesla still maintains a strong demand case for its EVs.
Robotaxi Performance
Tesla has been operating Robotaxi for over a year now, as it launched in Austin in mid-2025. That program has expanded to Houston and Dallas, the San Francisco Bay Area, and, most recently, Miami, Florida, the suite’s first appearance in the Sunshine State.
While the Robotaxi suite is still in its early phases and Tesla is working through things like fleet size and wait times, the company has been able to undercut the pricing of its competitors and has a great safety record.
Merger Speculation with Tesla and SpaceX
This is perhaps the biggest topic that many are speaking about with Tesla and SpaceX, and it is the one thing that seems to be on the mind of every investor.
Jefferies warns that growing talk of a Tesla-SpaceX merger could cause Tesla stock to trade more like a SpaceX proxy, which may disconnect it from underlying automotive fundamentals. SpaceX has a lot going for it, especially its compute deals that have been widely publicized as of late.
Profitability in New Projects Could Take Some Time
Tesla has a few long-term ventures in the pipeline, most notably the Optimus project and Robotaxi, which is launched but will take several years to expand to a meaningful level that resonates with everyday people.
This is something that investors need to be careful of. Tesla’s projects could take some time to round out, so Jefferies advises that these may carry initial losses, rather than immediate profit. Seasoned Tesla investors have echoed something like this for a long time; they knew going in it would not be an open-and-shut strategy. It was going to take time.
These new projects are no different.
Investor's Corner
NASA taps SpaceX to launch the telescope that could unlock new worlds
NASA’s Roman Space Telescope heads to orbit this August aboard SpaceX’s Falcon Heavy with massive scientific ambitions.
SpaceX is set to play a central role in one of NASA’s most anticipated science missions in years. The company’s Falcon Heavy rocket, currently the most powerful operational launch vehicle in the world, will carry the Nancy Grace Roman Space Telescope into orbit on August 30 from Kennedy Space Center in Florida. Roman is now in final preparations inside the Payload Hazardous Servicing Facility, where on June 26 technicians used a crane to lift the observatory into a specialized stand for fueling and pre-launch testing.
Roman is named after Nancy Grace Roman, NASA’s first chief of astronomy, whose career helped shape how the agency approaches space science.
NASA chose SpaceX Falcon Heavy because of Roman’s needs to reach a specific orbit far from Earth, well beyond where a standard Falcon 9 can deliver it. The Falcon Heavy, which first flew in 2018, has since become NASA’s go-to option for missions that need serious muscle without the cost and complexity of older launch systems.
Celebrating SpaceX’s Falcon Heavy Tesla Roadster launch, seven years later (Op-Ed)
Roman will carry a field of view at least 100 times wider than the Hubble Space Telescope, meaning it can photograph enormous swaths of the universe in a single shot rather than the narrow slices Hubble captures. That difference in scale is significant. While Hubble reshaped our understanding of the cosmos over 30 years, Roman is built to work faster and wider, surveying hundreds of millions of galaxies at once.
One of Roman’s most compelling capabilities is its potential to discover and photograph planets orbiting stars outside our solar system, and with enough precision to directly image planets that would otherwise be lost. That means scientists could study the atmosphere and surface characteristics of distant worlds rather than simply confirming they exist. Combined with Roman’s sweeping field of view, the telescope could detect thousands of exoplanets, and some of those planets may be in habitable zones where liquid water could exist. No telescope currently in operation has this level of power and capability. That capability alone could change what we know about other worlds, and perhaps finally answer the question: are we the only intelligent lifeforms in existence?
What Roman actually finds once it reaches orbit is an open question, and that is exactly what makes this launch worth watching.
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