Tesla shares are taking off.
The electric-auto maker's stock closed more than 8% higher at $441.61 a share on Tuesday following S&P Dow Jones Indices' announcement that the cult stock would be added to the S&P 500 index.
At a $411.5 billion market cap and a 111-times forward price-to-earnings multiple, Tesla would be larger than 97% of the index's components and one of its most expensive large-cap stocks.
It would also be one of the most volatile — Tesla's average daily stock move is far higher than that of the S&P's 10 biggest companies, a CNBC analysis found.
Nevertheless, betting against Tesla may not be in investors' best interests, TradingAnalysis.com founder Todd Gordon told CNBC's "Trading Nation" on Tuesday.
"This is sort of a hero's story," he said, pointing to the stock's consolidation after the May 30 SpaceX launch. "The same kind of triangle pattern may be happening here on the back of a successful launch."
Another major driver has been Tesla's sale of environmental regulatory credits to traditional automakers, an incentive program that has been a steady revenue stream for the company, raking in $428 million in the second quarter and $397 million in the third.
"They're selling these credits to the traditional gas-guzzlers," Gordon said. "I kind of view it ... like fighting the Fed. It's like saying the stock market rally isn't going to continue because the Fed's behind it. You're sort of fighting the same force that won't be defeated. So, I like it. I'm long. I'll continue to stay long."
On the other side of the trade was Mark Tepper, president and CEO of Strategic Wealth Partners, who admitted his had been the wrong side for quite a while.
"For this company, fundamentals just don't matter at all," he said in the same "Trading Nation" interview. "We are a 'growth at a reasonable price' firm, and the issue with Tesla, in my opinion, is there's nothing reasonable about the valuation."
"Now, that doesn't mean that the stock can't go higher," Tepper said. "That doesn't mean the stock won't go higher. It just doesn't fit our strategy."
He warned that profits from the regulatory credits could "dwindle over time" as legacy automakers roll out their own electric vehicles in earnest, adding that Tesla is "still losing money if you're just looking at vehicle sales."
"It's trading at 10 times [enterprise value] to sales and that's crazy expensive for a software company," Tepper said. "Ford and GM are at way less than 1 times. This is still an automaker at the end of the day. It's a very capital-intensive business, and I just think it's very expensive right here."
Tesla shares have climbed a stunning 428% year to date. The company's price-to-earnings multiple was 875 as of Tuesday's close.
Disclosure: Gordon owns shares of Tesla.