Shares of Tesla (NASDAQ:TSLA) surged on Thursday, rising about 7.1% as of 2:30 p.m. EST.
The growth stock's gain was likely driven by a number of factors, including a bullish day in the overall market, political news, and analyst optimism for the stock.
RBC Capital analyst Joseph Spak upgraded Tesla stock on Thursday, giving shares a sector perform rating, which is like a hold rating. This is up from an underperform rating previously. Along with the rating change, the analyst boosted his price target for the stock from $339 to $700, citing the automaker's access to inexpensive capital and its growth opportunity.
Meanwhile, the stock is likely also getting a lift from a bullish day in the overall market. As of this writing, the S&P 500 and Nasdaq Composite are up 1.4% and 2.3%, respectively.
Of course, investors are likely also incrementally bullish on Tesla because Congress has confirmed President-elect Joe Biden's election victory. Democrats are known for pushing more green energy legislation, which could benefit Tesla.
With a 15% gain year to date for Tesla shares, the company now commands a market capitalization of nearly $800 billion. Investors should be cautious about investing in shares at these levels, as the valuation seems to be pricing in near-flawless execution in the coming years.