Tesla Inc. (NASDAQ: TSLA) shares have continued a rise that made the company more valuable by market cap than Verizon, Netflix and Disney. Now, it has closed in on the market cap of JPMorgan Chase & Co. (NYSE: JPM), America’s largest bank, and one of the premier financial institutions in the world.
Tesla’s current market value is $308 billion. JPMorgan’s is $312 billion. Over the past 12 months, Tesla’s stock is higher by 652%, while JPMorgan’s is down 2%.
The extraordinary figures are particularly striking because of JPMorgan’s success. Run by one of the most famous financial executives in America, Jamie Dimon, the bank had revenue of $33 billion and net income of $4.7 billion in the second quarter. The bank has 250,000 employees.
The electric car company is comparatively very small. Tesla had revenue of $6.0 billion in the second quarter, which was down 5% from the same period a year ago. Of that, $5.1 billion was from automotive operations. Net income was a mere $102 million. If its revenue runs at a similar rate for the balance of the year, automotive revenue may reach $25 billion. However, the COVID-19 pandemic could push that number much lower.
Tesla built 82,272 cars in the period, 5% less year over year. It delivered 90,891 cars. Perhaps Tesla’s deliveries may reach 375,000 this year. Once again, the pandemic could hamper that. And contrast it to Volkswagen, the world’s largest carmaker by unit sales, which reached 10.97 million last year.
JPMorgan competes with some of the largest financial institutions in the world, particularly Goldman Sachs and Bank of America. It has more than held its own against them and is likely to be a profit machine for years, if not longer.
Tesla, on the other hand, competes with every large car company in the world. Each either has electric cars or will soon. While the Tesla brand is a powerful one for consumers, it could be overwhelmed by vehicles from much larger manufacturers. Tesla could drop from its spot as the largest electric car company in the world.
JPMorgan stock is unlikely to move much over the next few months, unless a faltering economy pushes it toward steep losses. Tesla stock continues to rise most days, but if the history of its share price is an indication, it also would crash.
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