Cathie Wood Predicts 10-Fold Surge in Tesla Stock Over Five Years

Cathie Wood, known as "木头姐" in Chinese, has reaffirmed her bullish stance on Tesla, predicting that the electric vehicle giant's stock could surge tenfold over the next five years. Wood, the founder of ARK Invest, believes that several upcoming developments will help Tesla navigate its current challenges and drive significant growth.

Wood highlighted three key factors that she believes will bolster Tesla's prospects. First, the introduction of the new Model Y, which is expected to capture a significant portion of the market. Second, the imminent launch of Tesla's robotaxi commercial service, which Wood anticipates will account for 90% of the company's future value. Third, the upcoming release of a more affordable car model in the second quarter, which is expected to attract a broader range of customers.

Despite recent setbacks, including a sharp decline in sales and deliveries in key markets and increased scrutiny on CEO Elon Musk, Wood remains optimistic about Tesla's long-term prospects. She acknowledges that Tesla's struggles in the Chinese market may have a short-term impact on its stock price but does not expect this to derail her five-year target price prediction of $2,600 per share.

Wood's confidence in Tesla is reflected in her investment strategy. As of March 24, Tesla remains the largest holding in ARK Innovation ETF, accounting for 10% of the fund's $5.8 billion in assets. However, this represents a decrease from the nearly 16% share it held at the end of 2024. Wood's aggressive bets on disruptive technologies have made her a prominent figure in the investment world, but her flagship fund has underperformed in recent years.

ARK Innovation ETF saw gains of 68% in 2023 and 8.4% in 2024, but it is still down 65% from its peak. This underperformance has been attributed to Wood's bold predictions on stocks like Tesla, Zoom, and Roku, which initially drove her fund to an asset peak of over $600 billion in early 2021. Despite the recent challenges, Wood continues to advocate for her investment thesis, emphasizing the transformative potential of Tesla's robotaxi business and other innovative technologies.