- Cathie Wood of Ark Investment forecasts Tesla’s (TSLA) stock to climb to $2,600 within five years – a potential 838% increase from its current level of $277 – driven primarily by robotaxis, which she predicts will account for 90% of the company’s value, despite the stock experiencing a 32% decline this year.
- Tesla faces challenges with declining sales in Europe and China, where BYD Co. overtook it with over $100 billion in sales last year, yet Wood sees its competitive edge in EV metrics and upcoming innovations like the Model Y refresh and a lower-cost model as key to recovery.
- Despite Tesla comprising 10% of Ark’s $5.8 billion ARK Innovation ETF, down from nearly 16% at 2024’s end, and the fund’s 65% drop from its peak, Wood remains bullish, emphasizing Tesla’s robotaxi potential in Western markets and unaccounted humanoid robot initiatives.
Cathie Wood, speaking in an interview with Bloomberg TV on the sidelines of the HSBC Global Investment Summit in Hong Kong on Tuesday, continues to champion Tesla Inc. (TSLA), projecting its stock price to soar to $2,600 within five years, driven predominantly by its robotaxi ventures, which she estimates will constitute 90% of the company’s value during that period. Despite Tesla’s sales declining in 10 of the last 12 months in Europe, with a notable 40% drop to 16,888 new car registrations in February according to the European Automobile Manufacturers’ Association, and a 32% slump in its stock this year, Wood remains undeterred. She views Tesla’s competitive edge in range and power per price point as a key strength, positioning it alongside China’s BYD Co., which surpassed Tesla with over $100 billion in sales last year, though she notes BYD has yet to enter the robotaxi space.
Tesla’s challenges extend beyond Europe, with sales and shipments faltering in major markets like China amid political backlash against Elon Musk and his Department of Government Efficiency’s job cuts, yet Wood sees any failure in China as merely a short-term setback to the stock’s trajectory. Bloomberg notes that analysts like UBS’s Joseph Spak and Evercore ISI’s Chris McNally have slashed their full-year delivery forecasts, bracing for a potential second consecutive annual sales decline, a stark contrast to Ark’s optimism rooted in Tesla’s broader technological ambitions. Tesla remains the cornerstone of Ark’s flagship ARK Innovation ETF (ARKK), comprising 10% of its $5.8 billion assets, down from nearly 16% at the end of 2024, reflecting Wood’s unwavering faith despite the fund’s 65% drop from its peak and underperformance against the Nasdaq Composite (^IXIC) over five years.
Wood highlights Tesla’s upcoming catalysts, including the Model Y refresh, the commercial launch of robotaxi services in Austin, Texas, and a second-quarter unveiling of a lower-cost model, as pivotal to reversing current difficulties and unlocking long-term growth. She argues the robotaxi market offers greater potential outside China due to higher ride-hailing costs in Western countries, an area where Tesla’s advancements in autonomous technology could outpace competitors. While Ark’s earlier 2023 analysis pegged Tesla at $2,000 by 2027, Wood’s updated $2,600 target reflects her belief in Tesla’s ability to seize market share from traditional automakers and capitalize on disruptive innovations like humanoid robots, which she notes are not yet factored into the valuation, underscoring her conviction in Tesla’s transformative potential despite its present struggles.
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