Cramer Says Tesla's Stock Will Eventually Rise Above $968

Shares of Tesla Inc TSLA looked to be on track to hit $1,000 per share but tumbled Wednesday to close at $734.70.

The stock will be back at former highs at some point, but in the meantime, the reversal is "simply what happens," CNBC's Jim Cramer said on Wednesday's "Mad Money."

Cramer Disagrees With Tesla-Bitcoin Comparison

Tesla's stock peaked at $968 Tuesday, and despite a sharp and sudden selloff, the stock is still up 75% since the start of 2020, Cramer said.

This type of volatility was seen before in Bitcoin, although Cramer said he isn't buying the comparison.

Tesla's volatility is the result of sellers letting "some air out of the balloon," although all signs point to "plenty of helium left," Cramer said. Tesla is at its core a "technology company on wheels" that has shown plenty of growth potential, he said.

Tesla's product uses less energy and emits far fewer carbon emissions. Its rise comes at a time when consumers worldwide are starting to take action to lower emissions.

'Natural Buyers' Of Tesla Shares 

Part of Tesla's move higher can be attributed to what Cramer describes as a "natural buyer," he said.  

This refers to anyone who buys Tesla stock to "establish an actual position" instead of covering a short position.

These investors merely went on to sell the stock and lock in their profits, which created a "genuine heaviness that really spooked the market," the CNBC host said.

What's Next For Tesla 

Cramer said he isn't sure when Tesla's stock will return back to $968, but he is confident it will happen.

"Maybe it will take a while, but when it gets back there, I bet it keeps climbing," he said.

The stock was trading 2.08% higher at $749.96 at the time of publication.

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