Cathie Wood and her investment firm ARK Invest have kept Tesla as their main holding for quite some time now, and they’re still acting bullish in spite of massive gains for the company over the past two years.
The exchange-traded fund (ETF) manager and long-time bull for Tesla’s (TSLA) stock appeared on CNBC‘s “Halftime Report” Wednesday, to talk about ARK Innovation’s growing confidence in the electric vehicle (EV) company.
In the segment, she discussed Tesla’s choice to diversify its cash with Bitcoin, the significance of Special Purpose Acquisition Companies (SPACs), and why Tesla still has room to grow.
Among noteworthy reasons Tesla is undervalued, Wood claims, is a lack of modeling the company’s ride-share potential when forecasting its revenue.
“Our confidence in Tesla has grown as we’ve done research on what ride-sharing potentially could add. It could limit the risks significantly, it’s a much more profitable business than electric vehicles,” said Wood to CNBC’s Bob Pisani on Wednesday.
“Even though there is some debate at Tesla whether or not they should launch a human driven ride-hailing network, it would be a very good bridge we think to their autonomous strategy and we think they will decide to do that,” she added.
Cathie Wood vs Warren Buffett since $ARKK inception…
Wild. pic.twitter.com/CXPAJz1HUO
— Nate Geraci (@NateGeraci) February 17, 2021
Within the ARK Innovation ETF, Tesla makes up more than 8.5% of the ETF’s weight. When Tesla goes up, ARK ETFs also ride the wave.
More recently, Wood and ARK have added a number of SPACs to their portfolio, including some like Experience Investment (EXPC) which are currently undergoing mergers. Other previous SPACs owned by the company include DraftKings (DKNG) and Butterfly Network (BFLY), which also underwent the SPAC merger process.
In any case, Wood’s bullish valuation of Tesla and a future ride-share platform seem reasonable enough, and they’ve even been echoed by other firms and fund managers. She’s been rightfully bullish about the company so far, and while no one can predict the future, Wood’s investments certainly make the case for a growing Tesla revenue.
