- Tesla's market value deserves to be twice the combined value of General Motors and Ford, CNBC's Jim Cramer said before Tuesday's Wall Street open.
- During Tuesday's session, it basically got there.
- Tesla opened at nearly $883 per share, and then raced to an all-time intraday high of $968.99, hitting a market cap above $170 billion.
- The combined market cap of GM and Ford after Tuesday's open was about $85 billion.
At that point, the "Mad Money" host said he would reevaluate.
However, during Tuesday's session, Tesla's stock basically got there.
Shares of the electric-auto maker opened at nearly $883 per share, and then raced to an all-time intraday high of $968.99, hitting a market cap above $170 billion.
The stock, which closed at $887 per share, has remarkably more than doubled since the beginning of 2020. It ended Tuesday with a market cap of $159.9 billion.
The combined market cap of GM and Ford after Tuesday's open was about $85 billion.
Cramer said Tesla is a technology company, "and you got to value it like a technology company now." Tech companies generally trade at much high price-earnings ratios than car companies.
Tesla trades at a multiple of more than 80 times, while GM and Ford trade at multiples in the high single digits.
Shares of Tesla closed nearly 20% higher Monday, their biggest one-day gain in six years. The stock, adding almost that much on Tuesday, has gained about 235% in the past six months.
Cramer used to be relatively skeptical of Tesla, but his outlook turned more positive toward the company late last year, due largely to the wishes of his wife, Lisa, who wanted a Model X sport utility vehicle.
"I give up. The car is too damn great," Cramer said then.
Cramer has only become more bullish since then, especially after Tesla's Shanghai factory opened in 10 months. He recently said Tesla's success was reminiscent of the early days of Amazon and Netflix.
Since Dec. 11, the day Cramer said he had officially turned bullish, shares of Tesla have risen by more than $500.
"I'm still on board. I haven't left it. It's been 500 points since I started," Cramer said Tuesday. "A lot of people feel that I am late. I don't know if I'm late and I get 500 points, I'm kind of happy."
Billionaire investor Ron Baron, a major Tesla shareholder, told CNBC earlier Tuesday that he believes the company has the potential to hit "at least" $1 trillion in revenue in 10 years and continue to grow from there.
Last week, Tesla reported revenue of $24.6 billion in 2019.
The recent rip higher in Tesla shares is being driven by analysts raising price targets to catch up to the market and short covering by investors betting against the shares.
Tesla has also benefited from a market shift away from fossil fuel stocks in favor of post-petroleum energy stocks, according to CNBC's Michael Santoli. Tesla is among the best-known stocks in the alternative energy category.
On Friday, Cramer also touched on the move among investors and money managers away from fossil fuel stocks. He compared oil and other fossil fuel stocks to the stigma attached to investing in tobacco companies, saying they are in the "death knell phase."
The "Mad Money" host's comments last week came a few weeks after BlackRock chief Larry Fink used his annual letter to the world's biggest companies to warn that climate change will soon cause a "significant reallocation of capital."