Tesla stock reached an all-time high Thursday, briefly trading at $508.61 per share before closing at $499.27.
The company's stock has been on a tear since the S&P Dow Jones Indices announced this week that it will include the carmaker to the benchmark index prior to trading on Monday, Dec. 21. Money managers with funds that track the S&P 500 will need to buy the stock for their portfolios.
The stock is currently on track for its best week since the week ending Aug. 21, ahead of its 5-for-1 stock split on Aug. 31.
Morgan Stanley also upgraded Tesla to a buy-equivalent overweight rating Wednesday, the first time in years since the company put a buy rating on the stock, sending share prices up.
"Tesla is on the verge of a profound model shift from selling cars to generating high margin, recurring software and services revenue," Morgan Stanley auto analyst Adam Jonas said in a note on Wednesday. The firm upped its price target to $540 from $360.
Tesla recently reported its fifth consecutive quarter of profit on third-quarter revenue of $8.77 billion. The company also reported that it delivered 139,300 vehicles during the third quarter, a new record for it.
The company's stock is up more than 490% year to date.
CNBC's Michael Bloom contributed to this report.
Correction: Tesla had a 5-for-1 stock split.