"Tesla's recent execution makes it clearer what the company's potential is. It's not that the potential has changed—it's just clearer," the analyst told CNBC.com.
Now that Tesla is getting closer to producing a car more affordable for the mass consumer, "the stock should get the credit for the potential of the next mass-market vehicle," James said.
Not everyone is so bullish on the name. Tesla shares dropped 14 percent on Tuesday, after Goldman Sachs dropped its price target on the name to $84.
Perhaps even more damaging, the Goldman Sachs analyst, Patrick Archambault, said that the stock would only be worth $113 even in a best-case scenario.
(Read more: Tesla shares slammed on Goldman's low price target)
But James sees massive potential. Noting that Consumer Reports called Tesla's Model S one of the best cars it had ever tested, James said, "Tesla makes the best product in an industry that does $1.5 trillion in annual sales."
(Read more: Consumer Reports: Tesla Model S among best ever reviewed)
Ultimately, James' price target relies on a 20 times multiple on 2019 earnings before interest, taxes, depreciation and amortization, or EBITDA, of $10 per share. But is such a multiple really conceivable for the long term, when Ford and GM have price-to-earnings multiples of about 12?
"Comparing Tesla to Ford right now is like comparing Apple to Motorola back in the day," James said. "This company is doing something new and exciting, and the shares should reflect that."
Some options traders seemed to be hopping aboard James' bullish call. In Wednesday morning's biggest trade, one options trader bought 757 130-strike calls for $15.50 each. This reflects an expectation that Tesla shares will trade about $145 by next January.
"It's a momentum stock," said Dan Nathan of RiskReversal.com, "As long as the news flow continues to be better than people think and nothing disappoints, the stock stays bid."
Partially on the strength of the stock's 28.5 percent short interest, Nathan doesn't see the share price going back to two digits anytime soon. "As a trader, $100 should be an important support level," he said.