Tesla No Longer Among Top 10 U.S. Companies: Time To Reassess Where You Put Your Money?
Written by
Catherine Collins
Edited by
T. Woods
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MarketWatch recently reported that Tesla, the well-known electric vehicle manufacturer run by CEO Elon Musk, is no longer in the top 10 of the largest US companies.
The list of the largest US companies are based on market capitalization. Recently, Tesla’s market cap is approximately $550 billion, making it fall behind Vis, which has a market cap of around $566 billion.
This downgrade marks the first time in 13 months that Tesla is no longer on the list of the top 10 largest US companies.
Tesla Stock Under Pressure
In May, Rich Otto — Tesla’s head of product — announced that he was resigning. In his LinkedIn post, he explained that company morale was low, especially after Tesla announced layoffs, which made it hard for him to “see the long game.”
Indeed, Tesla has had a difficult year. According to Morningstar, their stock has dropped over 30% in 2024.
This is due to many factors, including global competition, consumer interest in electric vehicles, and supply chain issues.
Despite stock price drops, Morningstar reports Tesla is in “excellent financial health” because their cash and investments exceed their total debt. Currently, Tesla’s cash and investments are approximately $29 billion, whereas their debt is $4.6 billion.
Tesla’s Future
Morningstar gives Tesla a “Very High Uncertainty Rating.” This means that Tesla as a company could flourish or fail in the future. Morningstar points out that although Tesla was an early leader in the electric vehicle market, there is now significant competition.
Many car companies are dipping into the EV market and with lower price points. More consumer choices mean Tesla might have to make hard decisions about pricing and employees in the future.
Consumers should always do their own research when assessing whether or not a company is a good fit for their investment portfolio and remember that investing in individual stocks is risky.
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