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Price target bump reminiscent of Dotcom Bubble?

Morgan Stanley just increased its price target on a stock already trading at a huge multiple. And they increased it a lot. That seems like something we've seen before - say 15 years ago at the height of the Dotcom Bubble, don't you think?

Well, maybe there is one major difference. The stock isn't in the tech sector.

It's Tesla.

Specifically, Morgan Stanley has increased its price target on Tesla from $153 to $320. That's more than twice what it was before.

And Tesla's valuations are already rich. Tesla currently trades with a 1 year forward P/E multiple of 66.

It may not be a tech stock but Cramer still thinks Morgan Stanley's move feels eerily similar to the kind of thing that happened when the market was at its frothiest.

PeskyMonkey | E+ | Getty Images

For example, "On December 29, 1999 a pretty serious analyst at a pretty serious firm slapped a $1000 price target on what was then a $503 stock," Cramer said.

The call didn't pan out well although the company survived. More than 300 companies that went public at the time ultimately folded.

Now Cramer admits that there are a lot of differences between this market and the Dotcom Bubble era market.

Back then, many of the tech companies that ultimately went bust never turned a profit. "Tesla, on the other hand, is a profitable business," Cramer said. "Also, back then we saw massive insider selling. We're not getting that now."

And, perhaps most important, Tesla has a very specific and understandable way that it can grow into its multiple.

The Morgan Stanley analyst said "Tesla's quest to disrupt a trillion dollar car industry offers an adjacent opportunity to disrupt a trillion dollar electric utility industry. If it can be a leader in commercializing battery packs, investors may never look at Tesla the same way again."

"If anybody can disrupt an industry it's Tesla CEO Elon Musk," Cramer admitted.

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Nonetheless, Cramer can't help but note the similarities between then and now.

"Crazy price target boosts were part and parcel with the dotcom era. I don't want to repeat that era," Cramer said. "If this a one-off phenomenon, we'll be fine, but if it becomes a trend, be wary.That's when the fun ends and the pain begins."

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