Tesla surged after bullish comments from investor Ron Baron helped send the stock to parabolic heights, similar to the type of trading in late-1990s tech stocks.
The stock closed 13.7% higher Tuesday at $887.06, after touching $968.99 in earlier trading. Baron said Tesla could have $1 trillion in revenues in the next decade.
Research firm Bespoke Investment Group said the stock's big gain is rivaling some of the largest bubbles in stock market history, including the tech dot-com bubble and housing-related shares in the run-up to the financial crisis.
"Tesla's bubble looks a lot bigger than biotech, homebuilders, or the aggregate Tech sector's bubble," wrote Bespoke analysts. "We don't know how high Tesla's shares will get, but with the company valued at a premium to the vast majority of the largest stocks on the planet, it's hard to take it seriously as something other than a combination of speculative excess and positioning."
Bespoke said those types of moves often run longer than expected, but past parabolic surges have run out of steam, ending in dramatic sell-offs.
"Tesla...has more than quadrupled since September in an epic move higher that included an earnings beat, a short squeeze, and a pile-on from the enthusiastic fans CEO Elon Musk has always attracted," Bespoke wrote.
Tesla is up 112% for the year so far.
"Taking either side of this trade at this point is a dangerous game, so we'd keep any trades small or simply enjoy watching the drama from the sidelines," the Bespoke analysts wrote.