Ark Invest, a firm known for its bullish stance on Elon Musk and Tesla, believes that Tesla is well-positioned to dominate the self-driving cars and robotaxi fleet industry, which it anticipates could be worth up to $10 trillion by 2030. In April, Ark projected that Tesla's stock could reach $2,000 per share by 2027. Despite weak quarterly earnings and falling gross margins, Ark remains confident in Tesla's potential due to its focus on robotaxis.
However, Ark has been reducing its Tesla holdings in recent months, even as the stock experiences volatility. Their flagship Innovation ETF owned around 3.5 million Tesla shares in June, but by October 23, that number had fallen to 2.6 million shares, valued at $549.8 million. Despite this, Cathie Wood, Ark's CEO and investment lead, is still optimistic about their Tesla holdings.
Wood explained that Ark sells Tesla shares when the stock outperforms and reinvests in stocks with short-term concerns or significant underperformance relative to Tesla. They aim to increase their Tesla holdings during periods of stock underperformance.
Wood is also looking forward to the release of the Cybertruck in November, but she acknowledges potential near-term challenges and controversy, particularly related to profitability and scaling. Musk has indicated that the Cybertruck might not be profitable until scaling issues are addressed, which could take up to 18 months. Wood believes that the Cybertruck could be the next significant growth driver for Tesla. Tesla's shares have risen 76% for the year but experienced a slight decrease recently.
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