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Wall Street’s latest Tesla (NASDAQ:TSLA) stock prediction is extremely bullish. Ark Investment Management CEO Catherine Wood told CNBC on Wednesday she believes TSLA could hit $4,000 per share.
“If we’re right, this stock in our models is going to $4,000,” Wood said on “Squawk Box.” “If we’re wrong, and all they do is electric, our bear case is $600.”
That quadruple-digit price target would be a gain of more than 1,000% from the stock’s current trading level, translating to a market cap of more than $670 billion, from $58 billion currently.
Wood, whose investment company focuses on the growth potential of today’s disruptive technologies thinks electric cars will go mainstream faster than people realize. For that reason, and the fact that Elon Musk keeps exponentially driving innovation within the various companies he owns, she’s betting big on the name. In fact, TSLA is one of her overall fund’s largest holdings.
“If Elon Musk of SpaceX can do what they did…in space, they’re going to be able to produce the Model 3,” (the first mass market electric car from Tesla whose production is crucial to Musk’s goal to transition Tesla from a niche player into a more mainstream automaker), she said.
Musk notched a milestone in space on Tuesday (Feb. 6). After nearly a decade of development and in a monumental achievement for SpaceX and for US spaceflight, the company’s Falcon Heavy, the most powerful commercial rocket in the world successfully launched on its inaugural flight.
Shortly after the launch, Musk tweeted out a live camera shot of the rocket carrying Musk’s 2008 Tesla Roadster, complete with a dummy driver named “Starman” wearing a SpaceX spacesuit.
Follow Starman’s journey here:
Meanwhile, shares of Tesla have dropped over $30 this week despite the fact the company delivered 4Q/17 results that beat analyst expectations. Tesla reported $3.04 adjusted loss per share vs. $3.12 expected. Revenue came in at $3.29 billion vs. $3.28 billion expected – beating consensus estimates by $10 million. Tesla also reiterated expectations to produce 5,000 Model 3 cars a week by the end of Q2/18.
From a technical standpoint, with only mild resistance levels in the $315-$320 range, if the name can climb above the $330 level, and if market conditions remain favorable – keep in mind, the average bull market has lasted 5 years, but this run is in its ninth year – shares are likely to rally to the upper end of the price channel at around $360. That said, if the stock breaks its support around the $310 area, traders should watch for a move down towards the $300 level.
At last check, Tesla stock was trading 30 points down to $315. The name is flat year-over-year versus S&P’s 16.50 percent return through Friday.
Catherine Wood obviously has a faulty idea of “innovation” and the electric car industry. Far from being a boon to Tesla sales and profits, the overhwelmingly large number of electric car competitors coming down the pike means Tesla will face overwhelming competitin, from companies that, although they don’t have the apparently required expertise in luanching rocket ships, have mass produced automobiles fastert than Tesla canmanage and are more innovative to boot – witness the new Porsche CCS charging capability, which is twice that of Tesla, and the large number of companies building charging points before the cars are even on the road. Tesla, aside from having no patents or technology that anyone cares about, is losing the main driver of its sales – the tax credit loss of $7500.
Obviously Catherine has been asleep for a couple of years and still operates under the assumption that Tesla has an electric car monopoly. Catherine, just do a little basic research on just the first three competitors (out of 120plus) that Tesla must deal with : the Chevy Bolt, the Nissan Leaf and the Porsche Mission e. The Nissan Leaf was just awarded “Best value” over the Tesla Model 3 and the Bolt outsold ALL of Tesla’s vehicles during a recent quarter. The data suggests future disaster for Tesla, not a $4000 stock price.