Shares of Netflix Inc. (NASDAQ:NFLX) rallied more than 3 percent Tuesday, hitting a 52-week high of $577.10, after Bank of America Merrill Lynch boosted its rating on the video-streaming service’s stock to "buy" from "underperform," citing long-term subscriber growth and earnings potential. The financial firm also raised its price target on Netflix, more than doubling its original target to $722 per share from $350, driven by "improved marketing and content costs from global original content licensing."

The ratings boost is a "more constructive view of Netflix long-term subscriber and earnings potential based on its rapidly growing portfolio of 'AAA' original content," Bank of America Merrill Lynch analyst Nat Schindler said in a research note Tuesday. 

Netflix is currently the best performer this year in the Nasdaq 100, an index that tracks the largest non-financial Nasdaq companies, with its stock soaring more than 66 percent.

Netflix, which has a market value of $34 billion, rallied to an all-time closing high of $562.05 on April 16 after the movie streaming service topped 62 million subscribers globally during the January-March quarter, as original shows such as "House of Cards" drew new viewers worldwide. Internationally, Netflix added 2.6 million members versus a forecast of 2.25 million due to stronger growth than expected across a number of markets.

Meanwhile, the company attributed strong U.S. growth to its original content, including the launch of the third season of "House of Cards" and new shows "Unbreakable Kimmy Schmidt" and "Bloodline." 

Subscriptions during the first quarter topped Wall Street expectations, despite quarterly earnings that missed forecasts. The Los Gatos, California-based company added 2.3 million U.S. members, beating estimates of 1.88 million. The company forecasts second-quarter net additions of 0.6 million, in line with a year ago.

Schindler forecasts that Netflix will reach 50 million international subscribers by 2017 and 120 million international subscribers in the long term. 

Netflix turned in first-quarter net income of $24 million, or earnings per share of 38 cents, on revenue of $1.57 billion, compared with a profit of $53.12 million, or earnings per shares of 86 cents on sales of $1.27 billion a year ago. Wall Street had expected the company to report net income of $39 million, or earnings per share of 63 cents, on revenue of $1.57 billion, according to analysts polled by Thomson Reuters.

Looking ahead, Netflix forecasts second-quarter earnings of 26 cents a share, down from $1.15 during the same period a year ago, and below current estimates of 34 cents per share, according to analysts polled by Thomson Reuters. 

The company, whose stock has traded at above $300 for a year and a half, also announced plans last month in a regulatory filing with the Securities and Exchange Commission to split its stock for the first time since 2004, pending shareholder approval. 

Separately, Netflix is urging the Federal Communications Commission to reject the pending $48 billion merger of AT&T Inc. and DirecTV, unless competitive concerns about the deal are addressed. The merger would combine the second-largest U.S. wireless carrier and the largest U.S. satellite TV company.

"We've been highlighting concerns about AT&T's broadband practices and the need for appropriate remedies since last September," Anne Marie Squeo, a Netflix spokeswoman, said in a statement Tuesday. "The combination of these companies would increase the incentive and ability to limit competition and innovation in the online video space."