(NASDAQ:TSLA) jumped on Monday, rising as much as 6.3%. As of 10:15 a.m. EST, however, the stock was up only about 2%.The growth stock’s gain follows news of an analyst’s move to upgrade his 12-month price target for Tesla.A chart showing a stock price moving higher. So what On Monday, Baird analyst Ben Kallo raised his 12-month price target on the shares from $488 to $728, representing nearly a 50% boost to the target price.Following the automaker’s recent aggressive expansion of its manufacturing capacity, including the late 2019 launch of its Shanghai factory and the ongoing construction of factories in Berlin and Austin, Texas, Tesla is entering into a new phase as a company, Kallo says. During this phase, CEO Elon Musk may consider combining businesses where he is a leading shareholder, the analyst speculates. Musk is a major shareholder of Tesla, spacecraft company SpaceX, and the underground infrastructure specialist The Boring Company.This view, however, is “mostly conjecture on our part,” Kallo added.Now what Despite the fact that the analyst’s 12-month price target of $728 is below where shares are trading today, Kallo reiterated an outperform rating, noting that he thinks the stock could still have upside in the near term.But investors should remember the stock’s ballooning valuation. The shares certainly have considerable momentum, with the stock up more than 20% year to date and over 650% over the past 12 months. But there’s risk that the stock could fall sharply if something causes investors to decide it isn’t worth its extremely pricey valuation.Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.