Ark Invest has been a notable Tesla bull for some time. The company’s reasoning is straightforward, if somewhat novel.
Ark Invest made headlines in April when it predicted that Tesla (TSLA) shares would be trading at $2,000 per share by 2027. At the time, the share price of the company’s stock was approximately $160.
Since then, Tesla’s stock has risen, but it remains at roughly 10% of the value Cathie Wood expects it to reach. Despite margin pressures and consistent price cuts, Ark Invest has not changed its thesis.
The reason for Ark’s unwavering support of Elon Musk‘s electric vehicle company is straightforward: Ark does not view Tesla as a conventional auto stock.
“This is not an auto-play. This is an autonomous taxi platform play with margins comparable to software-as-a-service,” Wood told Benzinga. Analysts and Tesla bears are unable to comprehend that Tesla should trade like a technology stock and not like traditional automakers.
Although Ark is optimistic about Tesla as an AI company, the vertical it is most optimistic about is the autonomous taxi business, which Ark believes could generate up to $10 trillion by 2030.
Musk stated in July that Tesla may be close to launching production of its robotaxis, a product he believes will have “quasi-infinite demand” despite the fact that the company has not yet developed autonomous driving technology. And the nascent robotaxi industry, in which Tesla is not currently involved, has recently struggled in the few cities where it is present.
Musk stated in July that he sees a path to a five to ten times increase in the company’s value, echoing and bolstering Wood’s projections. Musk provided a simple line of approval on Friday in response to Wood’s assessment of Tesla as a tech play rather than an automotive play.
“Accurate,” he stated.
Dan Ives of Wedbush shares this view of Tesla as a technology titan rather than an automaker. Ives, who recently predicted that Tesla’s supercharger network could generate up to $20 billion annually by 2030, told TheStreet that the impending monetization of Tesla’s services positions the company for tremendous growth.
Ives stated, “The Bulls’ disruptive technology remains at the center of the debate surrounding their name.” “I’ve always considered them a technical play. And I would argue that the FSD angle makes them one of the top AI plays in the next three to five years.”