Tesla Inc. (NASDAQ: TSLA) has a market cap of $308 billion. Most of the nearly three dozen analysts who cover the company now rate it a Buy. One analyst forecasts that its stock price will rise from its current level of $1,650 to as much as $2,400. That would lift its market cap to $448 billion. The figure would be well above Walmart Inc.’s (NYSE: WMT) current market cap of $376 billion.

Investment research firm investment firm Piper Sandler raised its target to $2,400 from $2,322 following Tesla’s report of second-quarter earnings. Another research firm, Wedbush, has set a target of $2,000. More mainstream research operation Morgan Stanley has what it calls a “bull case” forecast of $2,070. That would drive Tesla’s market cap to $386 billion, also above Walmart’s.

The relative worth of the two companies seems absurd. Walmart is the world’s largest retailer. Revenue in its last fiscal year was $524 billion and net income was $15 billion. Walmart employs 2.2 million people, and it has 11,500 stores around the world that serve 265 million people every week. It also has one of the most visited online retail sites in America, most likely second behind only Amazon.com based on traffic.

Walmart’s share price increase in the past year has been impressive, up 25%. Yet, Tesla’s is up 652%.

It is an understatement to say Tesla is very small compared to Walmart. 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.

Walmart could be considered the Volkswagen of the retail industry, because of its size relative to other retailers and the global reach of its locations.

One major concern about Tesla is that it 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, rival vehicles from much larger manufacturers could overwhelm it.

The case against the future of Walmart is that e-commerce will rob it of brick-and-mortar sales. Essentially, Amazon and other large e-commerce sites will take much of its revenue. It will be left with huge stores where fewer and fewer people shop.

People who support Tesla’s current valuation, or one higher, have to make the case that eventually it will be one of the largest companies in the world. It will have to leapfrog a number of rivals, including General Motors, Toyota and Volkswagen. The risks this will not happen are long.

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