Tesla's S&P 500 Inclusion Performance Lags Behind Index Funds
On December 18, 2020, Tesla (TSLA) joined the S&P 500 at a closing price of $695 per share. A $10,000 investment in Tesla then would be worth approximately $15,700 today after one stock split and current valuation. In contrast, an equivalent amount invested in an S&P 500 index fund would have grown to about $20,500 before dividends. Despite significant revenue growth—surpassing $100 billion annually compared to just over $31 billion in 2020—and increased vehicle deliveries and energy storage deployment, Tesla's stock performance has underperformed the broader index. The S&P 500 rose by about 105% since that time period. Tesla’s valuation remains high at more than 330 times earnings today, similar to its entry price into the S&P 500 in terms of multiple compression. While Tesla continues to invest heavily and expand autonomous driving services like Robotaxi and Cybercab, investors are paying for future growth that has yet to materialize.
Tickers: $TSLA
Topics: index inclusion impact S&P 500 Tesla stock performance