This Analyst's Tesla Stock Upgrade Makes No Sense

Shares of Tesla (NASDAQ: TSLA) surged 8% to another all-time high on Thursday, driven in part by a big upgrade by auto analyst Joseph Spak of RBC Capital Markets. The stock continued to rocket higher on Friday. Spak raised his rating for Tesla stock to sector perform (the equivalent of hold) from underperform (the equivalent of sell). Meanwhile, he more than doubled his price target to $700.

The analyst gave two main reasons for this change of heart: Tesla's ability to raise capital cheaply and increased expectations for growth over the next five years. However, neither justification makes sense. Instead, this looks like another case of an analyst chasing Tesla stock, which has moved far into bubble territory after surging more than 800% over the past year.