Tesla (TSLA) stock has had its up and downs of late, but it’s certainly been up over time. Tesla is part of the S&P 500; the index most analysts use to measure the overall market.
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What does Tesla’s presence on the S&P 500 mean for investors in 2025? Here’s what you need to know.
Tesla Is Number 9 on the S&P 500
As the name implies, there are 500 stocks on the S&P 500. Tesla is number nine on this list, which means it carries more weight on the index than 98% of the companies on the list, per Slickcharts.
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Tesla Makes Up Nearly 2% of the Index
The S&P 500 is a weighted index, with the larger companies higher on the list and comprising a larger percentage of the overall metric. In the case of Tesla, its stock makes up 1.82% of the total S&P 500 index.
Tech Stocks Dominate
The top 10 stocks in the S&P 500, which make up 38% of the index, are nearly all tech or tech-adjacent stocks. They are Nvidia, Microsoft, Apple, Amazon, Meta, Broadcom, Alphabet (Class A), Alphabet (Class C), Tesla and Berkshire Hathaway.
This Can All Add Up to Volatility
The S&P 500 is a bellwether for the general market, so it is expected to have some volatility. But the heavy concentration of tech stocks could mean extra volatility, especially as tariffs take effect and companies are incented to move manufacturing to the U.S.
Tesla, for example, is up 68% in the past year but down 20% year to date, as of Aug. 7, 2025, according to Yahoo! Finance. Its 52-week range is $192.04 to $488.54 — a very wide spread, particularly for a company of its size.
What Is the S&P 500?
The S&P500 consists of 500 of the largest U.S. stocks, weighted by market capitalization. This means that the largest companies are represented by a larger percentage than smaller companies. Nvidia is the largest company in the S&P 500 and represents 7.72% of the total index.
The S&P 500 is broadly used as an indicator for the stock market overall, and, by extension, the health of the U.S. economy. While the Dow Jones Industrial Average (commonly referred to as “the Dow” or even “the market”) is often what news outlets report on, that index consists of just 30 stocks. The S&P 500 represents more companies and therefore may be a better barometer for the health of the market.
The S&P 500 isn’t always the same 500 companies. Companies can be added and removed, based on decisions by the experts at the S&P Dow Jones Indices. These decisions are made four times a year.
To be included in the S&P 500, a company must have a market capitalization of at least $22.7 billion in the most recent quarter, according to Charles Schwab. It must have been profitable for at least the last four quarters. It must be based in the United States, and its stock must be traded on an approved U.S. stock exchange.
When it was announced that Tesla would be added to the S&P 500 in 2020, its shares gained 60% from the time the announcement was made until it was actually included the following month. A company’s shares will often spike when it is added to the index, if for no other reason than that such stocks are included in many index funds that seek to mirror the performance of the S&P 500 itself.
Tesla remains profitable despite its recent sales declines. At its July earnings call, the company reported that profits declined for the third quarter in a row, The New York Times reported. If the company were to report a quarterly loss, it would risk being removed from the S&P 500.
The inclusion of Tesla on the S&P 500 is certainly justified, given the company’s success. Whether it remains there will depend on the company’s ability to continue to record profitable results.
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This article originally appeared on GOBankingRates.com: Tesla Is in the S&P 500: 4 Things That Means for Investors in 2025
