Tesla hit a $300 billion milestone while making less than half of what Apple and Amazon were when they crossed the same mark

• Tesla passed the $300 billion market cap milestone while generating less than half the revenue of Apple and Amazon when they hit the same valuation.
• Morgan Stanley analysts say Tesla's milestone is reflective of a large valuation premium versus when Apple and Amazon achieved the same market cap.
• Tesla stock has skyrocketed in recent weeks, and the company recently became eligible to join the S&P 500 after reporting its fourth consecutive profitable quarter on Wednesday.

Tesla crossed the $300 billion milestone on July 13 while making less than half of what Apple and Amazon were making at the same point in time.

Tesla's stock has increased over 200% in 2020, and stronger-than-expected Q2 deliveries further fueled the surge ahead of Wednesday's earnings report. Possible explanations for its soaring valuation since the beginning of this year have been closely watched and discussed by Wall Street analysts, day traders, and investors. CEO Elon Musk even tweeted back in May that he thought Tesla's stock price was a bit too high, which sent the stock tumbling, but in recent weeks the stock has continued to climb.

"When compared to Apple's crossing of the $300bn mark in early 2011, Tesla is less than half the size of Apple and roughly 1/5th of the EBITDA [earnings before interests, taxes, depreciation, and amortization] of Apple at that time," Morgan Stanley analysts wrote in a research note on July 21. "Compared to Amazon's $300bn crossing in late 2015, Tesla today is 70% smaller by revenue with about 1/3rd the EBITDA."

Hitting this milestone while generating far less revenue than Amazon and Apple when the tech giants achieved the same market cap is reflective of a large valuation premium for Tesla, according to the analysts. Additionally, the note says, an inflation of the S&P 500 market helps explain some of Tesla's valuation premium.

"The S&P 500 P/E multiple is 70% and 33% higher" on July 21 "when Apple and Amazon reached their $300bn milestones respectively," the research note said. P/E stands for the price-earnings ratio, which is the ratio of a company's share price to the company's earnings per share.

The analysts wrote that they believe that the American electric vehicle and alternative energy company is "garnering greater levels of enthusiasm" from investors because of its demonstrated and perceived technological dominance compared to the competition in the international transportation market.

Shares of Tesla have skyrocketed in recent weeks despite a looming economic recession that's slowly making its way across the US, a global pandemic that forced the company to leave its two California factories, and a decline in vehicle deliveries.

The research note published by Morgan Stanley ranked Tesla's stock rating as underweight with a price target of $740.

Tesla reported its fourth consecutive quarterly profit on Wednesday afternoon, which sent the stock up another 7% in after-hours trading. Its longest-ever profitable streak, the four back-to-back quarters of generating a profit make the company eligible for inclusion on the S&P 500.

Read more from Tesla's Q2 earnings:

Tesla reports its longest-ever profitable streak, topping Wall Street's expectations for the second quarter

Elon Musk says Tesla is creating a 'major insurance company' after its botched rollout in California last year

It's official — Tesla picks Austin, Texas, as the location for its new $1 billion Cybertruck factory