by Bei Hu and Abhishek Vishnoi
Cathie Wood’s Ark Investment Management LLC remains bullish on Tesla Inc. and expects the stock will hit $2,600 in five years, or almost 10 times its current price.
Wood said in an interview with Bloomberg TV that Tesla’s robo taxis will account for 90% of its value over that time. Tesla has initiatives in humanoid robots that Ark hasn’t even factored into the price prediction, she added on the sidelines of the HSBC Global Investment Summit in Hong Kong on Tuesday.
Tesla shares have slumped 31% this year, even after a rebound in the last four trading sessions. Sales and shipments have dropped precipitously in key markets including Europe and China, as its billionaire founder Elon Musk faced political pushback. Domestic discontent has also grown over his Department of Government Efficiency’s move to cut thousands of government jobs.
Tesla’s sales have fallen in 10 of the last 12 months in Europe with the carmaker struggling mightily at the beginning of this year. The company registered 16,888 new cars in February, down 40% from a year ago, according to the European Automobile Manufacturers’ Association.
Meanwhile, some analysts have also started bracing for overall sales to drop this year, rather than rebound from the first annual decline in more than a decade. UBS Group AG’s Joseph Spak and Evercore ISI’s Chris McNally each cut their full-year estimate for vehicle deliveries earlier this month.
Chinese rival BYD Co. has overtaken Tesla in sales, topping $100 billion last year. Even a failure in China would only represent “a short-term hit” to Tesla’s stock and would not detract from Ark’s five-year price target for the stock, she said.
“If you look at metrics like range and power for a given price, Tesla is very competitive, if not the most competitive, depending on the model of car,” Wood said. “Tesla and BYD are both in the lead from an EV point of view alone. If you are layering in robotaxi, of course BYD is not seizing the moment there, at least not yet.”
Tesla remained the largest holding of her flagship ARK Innovation ETF, accounting for 10% of the $5.8 billion assets by March 24, according to information posted on the company’s website. That was down from nearly 16% at the end of 2024, according to a fact sheet posted on the website.
While Wood has been widely known for her aggressive bets on disruptive technologies, her flagship fund has struggled in recent years. Even after an 82% surge in the two years through 2024, ARK Innovation ETF is still down 65% from its peak and has trailed the Nasdaq Composite index over five years.
For Tesla and other automakers, the robo taxi opportunity is much bigger outside of China, because of higher ride-hailing costs in western countries, she added.
Wood saw the “refresh” of Tesla’s most popular car, the Model Y, together with the upcoming commercial start of its robotaxi services in Austin, Texas. She added the second-quarter unveiling of a lower-cost model will help the stock overcome the current difficulties.
In a 2023 analysis, Ark estimated Tesla stock would hit $2,000 by 2027, as it grabs market share from traditional automakers. In July, she predicted the formation of an autonomous taxi platform would be a catalyst for a roughly 10-fold jump in the Tesla share price.
Wood’s firm meanwhile is turning more bullish on China. Ark Investment bought US-listed shares of search-engine operator Baidu Inc. on Monday, ramping up previously minimal China-based holdings.
In 2021, Wood said she was holding off on adding bets in Chinese markets amid concerns about Beijing’s crackdown on some of the country’s high-profile tycoons. However, in January, Wood said that Chinese leader Xi Jinping’s push for “new productive forces” appears to be working and that Ark was “looking more closely at China now.”
“This shift in even Xi Jinping’s wording - common prosperity which is still a phrase used - towards to new productive forces, tech, efficiency, innovation, we are very impressed by what is going on in China,” she said on Tuesday.
Wood shot to fame during the height of Covid for her bold calls over pandemic darlings like Tesla, Zoom Video Communications Inc. and Roku Inc. Retail traders embraced some of her views, pushing her funds to more than $60 billion in assets at their peak in early 2021.
Copyright Bloomberg News
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