By this time, it’s borderline amazing how ARK Invest chief Cathie Wood moves the stocks involved in her portfolio, including when she continuously hypes up Tesla (Nasdaq: TSLA) despite liquidating much of the funds holdings in the name.
According to a recent report, Wood’s ARK Invest predicted Thursday that Tesla might reach $2,000 per share in five years due to a robotaxi surge. The bull and bear cases, calibrated to the 75th and 25th percentile Monte Carlo outcomes, are roughly $2,500 and $1,400 per share, respectively.
The EV maker is currently trading around the $160-mark, dropping nearly 10% on the day yesterday following CEO Elon Musk’s comments that they will keep cutting prices to drive up demand even after taking a big hit to margins.
Astronomical price targets for Tesla are not new with Wood, who at the beginning of 2021 forecast that Tesla would soar to $3,000 before the end of 2025, which on a split-adjusted basis amounts to $1,000 per share.
In September of that year following the bullish prediction, Wood sold about $266 million in Tesla stock.
Earlier in February 2023, Wood said that she sees Tesla stock climbing to $1,500 per share in the next five years with the advent of AI-powered chatbots like ChatGPT.
In March 2023, Wood sold Tesla stock anew, unloading a total of 139,642 shares worth $26.84 million.
Despite the seemingly moving goal posts that are Tesla price targets, ARK Invest’s recent prediction for the EV maker’s stellar rise hinges on robotaxis. Tesla’s Robotaxi, which was originally slated to be on the road by 2020 has since moved to 2024. Wood believes that Tesla is in the position to be “the platform — the primary platform” for autonomous taxis in the US.
“It is one of the most important investment opportunities of our lifetimes,” Wood said of robotaxis. The portfolio manager predicts that the robotaxi market might generate $8 trillion to $10 trillion in income by 2030.
There are currently no indications of Tesla moving forward with the 2024 target for the Robotaxi, or if they’re moving forward with it at all. The electric carmaker has just recently started finally rolling out the long-delayed Full Self-Driving Beta, and an anticipated update, v11, has just had its release rescheduled again.
Wood has long since been bullish about Tesla’s robotaxi, even predicting that it would contribute around $11 billion to the EV maker’s revenue for 2023.
Recently, Wood said she had $2 billion in losses from selling stocks during the market crash last year. But, she pointed out one silver lining in this terrible run: the billions of dollars in losses will help offset future tax obligations on gains.
Wood is known for her bullish calls for the industries her portfolio has invested in. Some of them include a surplus in lithium supply given the increase in demand, a $1 million price tag for bitcoin, and for the so-called disruptive innovation industry to be bigger than the current global GDP.
Information for this briefing was found via CNBC and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.