All the focus on lithium batteries tends to be within the context of electric vehicles, but Loop Capital said investors should have a smaller player on their radar: Enovix . The firm initiated coverage on the battery maker with a buy rating Tuesday, saying that by the end of the decade Enovix could be worth $80 billion. The company, which went public in July 2021 via a SPAC merger, has a current market cap of $2.26 billion. Loop Capital pointed to three key reasons underlying its bullish case. First, Loop said Enovix has an attractive $1.5 billion revenue funnel in place. Analyst Ananda Baruah added that Enovix's real potential is in production agreements with large vendors. Finally, the company could be an acquisition target from a major consumer player. Since its launch in 2007, Enovix has focused on the consumer electronics market, with plans to enter the more valuable – but more highly regulated – electric vehicle market. Shares of the company have surged more than 50% over the last month. But the stock is still down 64% from its all-time high reached last Nov. 22. Investors have rotated out of high-growth areas of the market since the Federal Reserve's rate hikes have changed the Street's valuation assumptions — making the promise of future profits less attractive. Baked into Loop Capital's long-term valuation is Enovix's expansion into electric vehicles. The firm pegs Enovix's consumer electronics segment as worth between $7 billion and $8 billion, but its EV market valuation at a potential $75 billion to $80 billion. "ENVX is gearing up to deliver a very attractive financial model with strong revenue growth and normalized software-type operating margins," Baruah wrote in a note to clients. "Looking forward, the battery (and specifically a particular threshold of battery capability) is the bottleneck to the manifestation of next-generation experiences that we are societally already taking for granted," he added. He said this includes AR/VR technologies, as well as the metaverse and electric vehicles. Ultimately, he said Enovix is the only company able to deliver attractive economics across multiple product categories. Loop Capital noted that Enovix's work in increasing the energy density in its products gives it a 5-to-9 year head start over its competition. The Wall Street firm has a $50 target on the stock, which is roughly 250% above where shares closed Tuesday. - CNBC's Michael Bloom contributed reporting.