In a recent interview with Yahoo Finance, ARK Invest CEO Cathie Wood shared “why she is remaining optimistic on Tesla,” comparing Tesla to Apple and the automaker’s disruption of the electric vehicle (EV) space to how Apple “changed the game” in the smartphone world.
When it comes down to Tesla, the stock, the company and the stock, we pay a lot of attention to its barriers to entry. And as long as we see those moving up– and they are moving up. Whether you’re talking about battery technology, it’s going to take a long time to catch Tesla. And what I mean by that is the traditional automakers. It’s the only company with an A– that has designed its own AI chip for autonomous driving. Taking a leaf from Apple’s book, Apple was the only company to design a chip for a smartphone, a computer in our pockets, our pocketbooks, and changed the game.
Wood, a longtime Tesla bull, talked about how Apple developing its own System-on-a-Chip (SoC) for smartphones changed the landscape of the market.
Last year, Tesla made a similar move when it introduced the D1 chip, “the world’s fastest AI training computer” that was developed in-house by the EV maker, in August at its 2021 AI Day event.
Around this time last year, ARK Invest raised its price target for Tesla stock to $3,000 USD by 2025. Later in September, Wood reaffirmed her confidence in the firm’s evaluation of Tesla’s performance and its price target.
In November 2021, the ARK Invest CEO said she believes Tesla could command a 20-25% market share in the automotive industry in the next five years if the EV maker becomes the first to succeed in developing self-driving technology.
Wood does acknowledge the looming threats to Tesla’s dominance in the global EV market, though. Last month, ARK Invest sold 145,977 shares of Tesla and purchased 420,057 shares of NIO.
Tesla is still ARK Invest’s largest holding, with the stock representing around 7.28% of the firm’s exchange-traded fund (ETF) portfolio. Wood’s flagship ARK Innovation ETF is currently down 36% over the past 12 months.
