(Bloomberg) — 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.
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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 push-back. Domestic discontent has also grown over his Department of Government Efficiency’s move to cut thousands of government jobs.
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.
“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.
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.
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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.
