It’s official. Tesla Motors Inc (NASDAQ:TSLA) is now part of the NASDAQ 100 index. It replaced Oracle Corporation (NASDAQ:ORCL), which is moving to the New York Stock Exchange, as of pre-market trading this morning. Tesla joins major tech companies like Apple Inc. (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB) and Google Inc (NASDAQ:GOOG) on the index.
Tesla sets new record high
Shares of Tesla Motors Inc (NASDAQ:TSLA) have been soaring since the beginning of the year, especially in the wake of the company’s first profitable quarter. Today the stock hit a new record high of over $130 per share before falling back down just below $130.
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The stock’s addition to the index not only provides an important vote of confidence but also means that many funds will be adding it to their portfolio—if they haven’t already. Numerous funds follow major indexes like the NASDAQ-100 (NASDAQ Indices:NDX), which means that they automatically invest in the companies that are part of the index.
The addition of Tesla could be good or bad
Of course Tesla’s addition to the NASDAQ-100 (NASDAQ Indices:NDX) is seen as a positive by some and a negative by others. Many analysts already think the stock is greatly overvalued, although others believe that the company’s stock price is justified because the company is blazing a new path for other automakers to follow in the future.
Benzinga’s Todd Shriber looked at 10 other companies were added or removed from the index and believes that the move will have little impact on Tesla Motors Inc (NASDAQ:TSLA)’s share price. Others, like Tom Benis of MarketWatch, believed that the addition would be more of a negative for the company than a positive. After all, investors tend to expect more out of companies after they have been added to a major index like the NASDAQ-100 (NASDAQ Indices:NDX).
At this point Tesla Motors Inc (NASDAQ:TSLA) shares have risen by about $5 since late last week, but now that the stock is officially in the index, movement is minimal. The company’s market cap is currently $15 billion.