Shares of Tesla soared 19.9% on Monday after Argus Research raised its price target to $808 from $556 and short-sellers scrambled to catch up to the stock.
The move was the biggest one-day jump since May, 2013.
The firm's analysts cited Tesla's strong fourth-quarter financials, which exceeded Wall Street's expectations last week. It also raised its earnings per share estimate to $8.01 from $5.96 and expects that to double by 2021.
The shares were trading just over $717 after the opening bell and hit an all-time high of $786.14. The stock is up more than 85% year to date. Tesla's market cap now stands at just over $140 billion.
"Our positive view assumes continued revenue growth from the legacy Model S and Model X, as well as strong demand for the new Model 3, which accounted for more than 80% of 4Q19 production," according to the research note.
"Despite past production delays, parts shortages, labor cost overruns and other difficulties, we expect Tesla to benefit from its dominant position in the electric vehicle industry and to improve performance in 2020 and beyond," it added.
Tesla said Wednesday that its vehicle deliveries should "comfortably exceed 500,000 units" for 2020. It had already reported deliveries of 112,000 vehicles globally during its fourth quarter. The delivery, a record for Tesla, exceeded Wall Street's expected 106,000.
Tesla said Jan. 3 that it delivered 92,550 Model 3 cars and 19,450 Model S and X vehicles during the fourth quarter. It was expected to deliver 87,900 Model 3, 9,800 Model S and 9,300 Model X vehicles.
Argus Research analyst Bill Selesky had already raised his price target on the company once this year, which made him the biggest bull among analysts at the time. On Jan. 7, Selesky raised his 12-month target to $556 from $396, citing strong fourth-quarter deliveries.
Tesla is among one of the biggest stocks to short, and investors betting against the company are getting hit.
"Tesla's short squeeze will probably shift into a higher gear as some short sellers re-evaluate their short thesis and begin to trim or close out their short exposure," S3′s Ihor Dusaniwsky said in a note last week.
Tesla shorts collectively lost $2.47 billion when the stock went up about 15% on Monday. That made for a total of $8.31 billion market-to-market losses in 2020 so far, according to data firm S3 Analytics.
"There's a lot of money chasing it right now, and I wouldn't even come close to touching it," Jim Iuorio, managing director of TJM Institutional Services, said of the stock Monday on CNBC's "Worldwide Exchange."