What happened

Shares of Tesla (TSLA 0.38%) are continuing their torrid move higher on Tuesday. The stock rose as much as 20.5% during the trading day -- on top of a near-20% gain on Monday. At one point on Tuesday, the stock crossed $940. As of 11:15 EST, however, Tesla shares were up 14% -- trading arond $890.

The stock's gain follows bullish commentary on the stock from major Tesla shareholder Ron Baron, whose investment firm boasts 1.63 million Tesla shares and hasn't sold a single share of the electric-car maker since it started buying the stock in 2014.

Model 3 interior and 15-inch touch display

Model 3. Images source: Tesla.

So what

Tesla revenue could climb as high as $1 trillion within 10 years, up from $24.4 billion today, Baron forecast in an interview with CNBC on Tuesday morning. "So basically, you're looking at the very start of ... what's going to happen with Tesla," Baron explained. "This could be one of the largest companies in the whole world." Baron believes Tesla can achieve this by delivering around 10 million vehicles per year, up from the company's target of more than 500,000 deliveries in 2020.

Of course, helping fuel the car stock's gain recently is likely a short squeeze of epic proportions. Short sellers have covered well over $12 billion worth of stock since June.

Now what

Investors should be mindful of Tesla stock's pricier valuation after surging more than 280% in just six months. The stock's price-to-sales ratio now stands at 6.5 -- up from below 2 just six months ago.

Of course, revenue is expected to climb sharply in 2020 as Tesla brings the Model Y to market and ramps up deliveries of its Model 3 in China. But there's notably more business growth priced into the stock today than there was six months ago.