Wall Street analysts have praised Tesla move to split its richly valued stock into smaller chunks, saying it had the potential to extend a 200% rally in its shares this year by making it easier for retail investors to hold the stock.

Shares in the electric carmaker rose more than 6% in early trading. The stock, which traded at around $1,467 before the bell on Wednesday, is among the highest priced on Wall Street.

The five-for-one split - Tesla's first - comes at a time when analysts and investors have expressed concerns over the stock’s high valuation in the market despite cash burn concerns.

"The move makes sense for Tesla, as it will make its shares cheaper and more accessible to young first-time retail traders using platforms like Robinhood," said Jesse Cohen, senior analyst at Investing.com.

"While stock splits are typically non-events for investors, the reaction seen in Tesla's stock following the announcement underlines the surging demand from the Robinhood-retail traders to get in on fast-growing tech names."

Tesla’s move follows a four-for-one split announced by Apple in late July, the iPhone maker’s first stock split since 2014.