Tesla's market capitalization surpassed $1 trillion on Monday, making it the fifth such company to reach the milestone.
Shares of the electric car maker jumped 12.6 percent after it concluded a deal to sell 100,000 cars to Hertz, a car rental company.
Tesla has been the world's most valuable automaker for some time, but brands like Ford and GM are making more cars.
Previously, only Apple, Microsoft, Amazon and Alphabet, which owns Google, reached $1 trillion.
For years, Tesla struggled to increase production of its cars, leading some investors to speculate that it would fail.
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But last year, the company, led by billionaire Elon Musk, developed itself and turned a profit for the first time, sending its shares to take off. The deal with Hertz is the biggest order from a car delay company ever and is seen as a further vote of confidence in the company.
Hertz will pay $4.2 billion for 100,000 Model 3s over the next 14 months, or a fifth of its fleet. The leasing company will also build a network of charging stations.
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Tesla cars have a range of about 200 miles per car battery charge, but there is a dearth of charging points in the US infrastructure, something the Biden administration hopes to change.
“Electric cars are now mainstream, and we are just beginning to see increased global demand and interest,” said Mark Fields, interim president of Hertz.
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Tesla produced about 500,000 cars in 2020, far less than the likes of Volkswagen (9.3 million), Toyota (7.2 million) and the Renault-Nissan-Mitsubishi alliance (6.8 million).
However, Musk has set an annual sales growth rate of 50% and hopes to eventually reach 20 million cars a year.
On Monday, it emerged that Tesla had pulled its latest update from Autopilot, the car's "fully self-driving" program, after drivers complained of problems.
Some drivers reported intermittent issues such as issuing safety alerts, although there was no danger. The company did not say when the driver assistance program would be reissued.
In August, the US National Highway Traffic Safety Administration opened a formal safety investigation into the Autopilot system, which operates on 765,000 US vehicles.
The investigation follows a series of 11 accidents involving Tesla Models and emergency vehicles since 2018.
Analysis by Michelle Fleury, New York business correspondent
Tesla has made a big leap and what makes it worthy of pride.
Only a few publicly traded US companies have managed to make $1 trillion or more in the stock market, and they are all technology companies.
These companies are the big names like Apple, Microsoft, Alphabet and Facebook. Amazon joined this elite club in January of last year, 23 years after it went public.
By comparison, it took just 11 years for the electric car maker headed by Elon Musk.
What makes Tesla's achievement even more remarkable is that it is the first automaker to achieve this feat.
Tesla's value is now equal to the combined market value of the nine largest automakers around the world, including auto giants such as Volkswagen and Toyota.
However, Tesla makes up less than 1% of global car sales.
Elon Musk and his company are rewarded for predicting the future direction of the industry.
And while Tesla may be a car company, Wall Street treats it - and values it - like a tech company.