Cathie Wood, the founder and chief investment officer of Ark Investment Management, expects the price of Tesla's stock and Bitcoin will soar in the next five years, which is the time horizon she sets for investments in her actively managed ETFs.
Despite recent sales of nearly $139 million worth of Tesla stock held by three of Ark's ETFs, Wood told New York Times columnist and CNBC co-anchor Andrew Ross Sorkin, a co-anchor at this week's SALT conference in New York City, that her "base case" for Tesla shares is $3,000 per share and her "best case" is $4,000 five years from now.
Tesla remains a 10% or greater holding in three Ark ETFs — ARK Innovation, ARK Next Generation Internet and ARK Autonomous Technology & Robotics — the same ETFs that recently sold some Tesla shares. Wood termed the sales as "opportunistic."
Her reasons for the forecast: Tesla is in the best position to solve for autonomous taxis, and the probability of that is rising — she's forecasting a $10 to $12 trillion autonomous taxi market by 2030, up from the $6 to $7 trillion she had expected previously — and makes the best car on the road today with the best electric battery technology, its own artificial intelligence chip and has the most data to use for training.
On Tesla founder Elon Musk's pontifications about the stock, Wood said, "Elon is always a year or two too early. We adjust for that in our forecasts."
She had announced a $4,000 target for Tesla stock in 2018, before the company announced a 5-for-1 stock split effective Aug. 31, 2020. Tesla shares actually hit Wood's $4,000 target on a split-adjusted basis in January 2021. Shares closed Monday at $743, down 16% from a $883 reach in late January of this year.
Bitcoin Forecast: $500,000
Wood also remains extremely bullish on Bitcoin, which several Ark ETFs have exposure to through holdings in Grayscale Bitcoin Trust; Coinbase, a cryptocurrency exchange platform; Square and Tesla — the latter two own Bitcoin, and Square is building a platform for decentralized financial services.
She is forecasting a more than 10-fold increase in Bitcoin's price five years from now to over $500,000 as more companies diversify cash holdings in "something like Bitcoin and institutional investors start allocating 5% of holdings toward Bitcoin."
