19-year-old Ali Parnian was cleared by the Østre Landsret high court on Friday over charges of stealing and setting light to a car in the Værløse area.
Parnian gained national media attention earlier last week when he received the support of politicians and crowdfunding donors after his business was hit by vandals.
He said his bakery had been targeted for refusing to pay protection money to local organised crime.
Parnian was cleared of the car theft charges by Lyngby City Court in October, while an acquaintance of the 19-year-old was convicted, Ritzau reported last week.
The prosecution appealed that verdict to the higher Østre Landsret court which upheld Parnian's acquittal, the news agency writes.
Conservative Party MP Mette Abildgaard was behind a social media appeal for support for the baker earlier last week, after reports emerged that his business had been targeted by vandals.
The fundraiser started by Abildgaard brought in 472,000 kroner (63,000 euros).
Minister for Immigration and Integration Inger Støjberg also showed her support over the incident during a visit to Parnian's bakery.
Police have since announced that details over the reportedly extortion-linked act of vandalism are 'unclear'.
Doubts have also been raised as to the veracity of Parnian's claim that extortion was the motive for the vandalism, Ritzau reported on Friday.
After reports emerged Thursday of Parnian's connection to the car theft case, public support for the 19-year-old began to wane and Abildgaard said she would look into whether crowdfunding donors could be offered their money back.
"None of the donated money has yet been paid out, and won't be until we know more," the MP wrote on Twitter.
Following the announcement of the baker's High Court acquittal on Friday, Abildgaard said on Twitter that she would await "more knowledge" of the circumstances of the vandalism before deciding what should be done about the donated money.
"[The car theft case] has no connection to the [vandalism] case from Tingbjerg, in which police are still saying 'there is an unclear picture'," she wrote.