Ark Invest expects Tesla stock to more than quadruple in value

Katie Wood’s Ark InvestArk fund predicts Tesla shares will more than quadruple to $4600 by 2026, Bloomberg writes.

Ark said as recently as last year that the electric car maker’s shares would rise to $3,000 by 2025, then updated the estimate amid new expectations about the prospects for Tesla’s robotaxi fleet and capital efficiency.

“Wood’s bullish scenario suggests Tesla’s share price could rise to about $5800 by 2026, while the bearish scenario suggests $2900, which is still about 3 times the current share price of $1005.”

According to Ark Invest analysts, Tesla stock will trade like a mature company in 2026, not a fast-growing one.

Note that Katie Wood has long been a supporter of Tesla and its CEO, Ilon Musk. While the flagship Ark Innovation ETF cut its position in Tesla last month, the electric car maker’s stock is still its largest holding, making up 10% of the fund.

Tesla shares were up about 1.8% in Monday trading.

However, not all investors harbor such optimistic sentiment toward Musk’s company.

For instance, David Trainer, CEO of investment research firm New Constructs, believes Tesla’s share price will fall to $150 to $200.

“Tesla enjoyed first mover advantage for a while, but it no longer has it, whereas there are many other electric car makers that are competing very successfully with Tesla,” he said.

According to a number of analysts, a key driving force behind Ark’s new model is the anticipation of increased demand for autonomous transportation, which has an estimated $11-12 trillion market. Ark also reinforced his confidence in Tesla’s ability to achieve fully autonomous driving, as the automaker’s anticipated fleet of cabs would give it 60% of its expected stock value in 2026. Also key to Ark Invest’s outlook for Tesla’s value is its efficient use of capital: Tesla’s capital expenditure per unit of additional capacity fell from $84k to $7700 in 2017.

Tesla has other potential opportunities that increase its margins and share price: Tesla’s bitcoin assets, energy storage, artificial intelligence as a service, and the creation of a humanoid robot. So far, these opportunities have not been considered in the forecast.


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