(NASDAQ: TSLA) underwent a 5-for-1 stock split in August 2020 and a 3-for-1 stock split in August 2022, a testament to its tremendous share-price appreciation in a very short time. The stock price skyrocketed 1,230% over the last five years, a rate of return that would have turned $10,000 into $132,000.

Stock splits themselves have little impact on a business, but the reason behind a split -- for substantial and sustained share-price appreciation -- can be an important signal for investors, as it often hints at solid fundamentals and strong growth prospects. Tesla bears will undoubtedly argue the company has neither, but Cathie Wood sees tremendous upside for Tesla.

Her innovation-focused asset management firm Ark Invest published a valuation model earlier this year that posits a bull-case price target of $2,500 per share by 2027. That implies roughly 860% upside for Tesla shareholders in a little more than four years. Is that realistic?

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Source Fool.com