Canada markets open in 30 minutes

Type 'Should I' into Google and you'll see why Tesla's stock was surging

Tesla (TSLA) stock trading advice is trending on Google, in a testament to the broadening speculation surrounding the stock after its extraordinary run-up.

As of Wednesday morning, typing “Should I” into Google (GOOG, GOOGL) produced a set of top suggested searches that led with, “Should I buy Tesla stock” and “Should I sell Tesla stock.”

This came on the heels of two straight days of double-digit returns that sent shares of the electric car-maker higher by a total of 36%, or $236 per share by Tuesday’s close. Tesla shares had more than doubled for the year to date through Tuesday.

“‘Buy Tesla stock’ is now the #1 autocomplete suggestion for the Google query “should I…,’” Datatrek co-founder Nicholas Colas wrote in a note Wednesday. “That’s pretty much all you need to know about this move.”

In other words, the implication seems to be that interest in Tesla’s stock has gone beyond the realm of active traders and experienced investor. Tesla’s surge has gone mainstream, and it may explain where the flood of buyers are coming from to bid up the stock.

According to Google, autocomplete predictions are generated as the company’s algorithms “look at the real searches that happen on Google and show common and trending ones relevant to the characters that are entered and also related to your location and previous searches.” (Tesla’s rank in Google’s autocomplete suggestions held even when an incognito window without search history was opened by Yahoo Finance).

Tesla stock advice is a top recommendation with Google's autocomplete. Screenshot as of Wednesday, February 5, 2020.

More broadly, a Google Trends analysis as of Wednesday morning showed search interest for the query “tesla stock” peaked for the most recently reported week of January 26 to February 1. The number one most-related query to that search, according to Google, was “beyond meat stock,” another high-flying stock that saw a similar run-up in prices last year. And Tesla’s stock surge has earned it bubble-like comparisons on other measures as well: The stock on Tuesday hit overbought levels that exceeded Bitcoin at its peak, based on one technical indicator.

Taken together, Tesla’s sudden spike in search interest in tandem with the surge in its stock price speaks to the broad intrigue of the company among bulls and bears alike.

Left out

But even though Tesla’s stock sits at the top of queries one of the world’s largest search engines, it’s probably not one of the top holdings for an investor holding a market portfolio.

Despite having a market capitalization that exceeded Nike’s (NKE), and topped Ford’s (F) and General Motors’s (GM) several times over as of Tuesday’s close, Tesla is not a member of the S&P 500.

As Datatrek points out, to be considered for inclusion in the S&P 500 – the most popular large cap index – a company must have its trailing four quarters of reported GAAP earnings be positive. It must also delivered positive GAAP earnings in its most recently reported quarter. Tesla otherwise meets other requirements, including having a U.S. domicile, a single class of stock, liquidity and at least six to 12 months of “seasoning” as a public company.

Tesla’s last four quarters of GAAP earnings totaled negative $862 million, Datatrek noted in its analysis. Tesla could be eligible for inclusion if it posted a first-quarter profit of at least $161 million, offsetting a second-quarter 2019 loss given that its third- and fourth-quarter earnings were positive by a combined $248 million.

“The bottom line here: index based investing, especially tied to S&P criteria, misses important disruptive companies while hanging on for dear life to the disrupted,” Colas wrote.

“Despite TSLA’s unquestioned popularity, only 4.2% of its float sits in ETFs, versus 7.3% for GM and 8.2% for Ford,” he said. “It’s easy to make a case for why it should be the other way around, even if TSLA’s valuation were actually reasonable rather than stratospheric.”

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

Read more from Emily:

Follow Yahoo Finance on TwitterFacebookInstagramFlipboardLinkedIn, and reddit.

Find live stock market quotes and the latest business and finance news