Tesla Inc (NASDAQ:TSLA) stock may be down 20% year-to-date in 2025, but that's not stopping analysts and investors, including Ark Invest to bet on the company's future success thanks to robotaxis, less expensive electric vehicles and other future catalysts.
Here’s a look at Ark Invest CEO Cathie Wood’s future price targets for Tesla and how investors could still benefit if she is right about the EV leader again.
Following Wood Into Tesla: Wood famously called a bullish price target of $4,000 on Tesla in 2018 that came true (split-adjusted) years later. While many were skeptical of Wood’s high price target at the time, her conviction paid off and helped cement her status in the financial community.
Wood announced a $2,600 price target for Tesla in June 2024, raising the bar from a previous price target of $2,000 for the electric vehicle stock.
Ark Invest has a price target of $2,600 for Tesla by the year 2029, with a bear case price target of $2,000 and a bull case of $3,100.
With Tesla shares trading at $301.98 today, an investor could purchase 3.31 shares with a $1,000 investment
Here's a look at how much the $1,000 could be worth in 2029 if Wood's various price targets come true:
- $2,000 Bear Case: $6,602, +560.2%
- $2,600 Base Case: $8,606, +760.6%
- $3,100 Bull Case: $10,261, +926.1%
Each of the price targets from Wood would gain 560% or more, representing huge returns over the next five years.
Keep in mind that the average return of the S&P 500 Index is around 10.5% annually since the fund's 1957 inception. The price target from Wood would mark a sizable outperformance to historical stock index returns.
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Why It's Important: Wood reiterated her $2,600 price target for Tesla earlier this year in several interviews. The fund manager said robotaxis represents a software-as-a-service-like business model that will provide high operating margins for Tesla.
The new price target is based on several factors, with the majority of the price target coming from Tesla's robotaxi ambitions.
"ARK estimates that nearly 90% of Tesla's enterprise value and earnings will be attributed to the robotaxi business in 2029," the open-source model reads.
Aside from the new price targets in the thousands of dollars, Ark also lists a price target of $350 for Tesla if it eliminates the robotaxi network from the model, stressing the importance of this future catalyst.
The new price target forecast model breaks down Tesla's 2029 revenue as 63% from robotaxis and 26% from electric vehicles, with the rest coming from items such as insurance and energy storage.
Ark Invest estimates that Tesla could have revenue of $1.2 trillion in 2029 and EBITDA of $440 billion. The prediction assumes that Tesla will sell 5.8 million electric vehicles in 2029.
"Tesla plans to unveil its dedicated robotaxi vehicle in August 2024. While Tesla could transform its current fleet into robotaxis, we believe a custom-built CyberCab reflects increased confidence that its autonomy software will allow Tesla to scale the robotaxi business."
The new Ark Invest price target does not include any impact from the Tesla Semi, Tesla Supercharging network, FSD licensing or AI-As-A-Service. The price model includes minimal results from the Optimus bot.
"(Tesla's) business model should transform from one-off vehicle sales to a recurring revenue base as every car becomes an AI-powered cash flow generation machine."
Wood's new price targets would take Tesla to a market capitalization of between $7 trillion and $10.9 trillion and the title of the world's most valuable company.
Tesla CEO Elon Musk recently highlighted the potential value of the robotaxi business and Optimus bot as the catalysts that could make Tesla the most valuable company in the world, worth north of $30 trillion.
Many laughed at Wood when she made her bullish $4,000 price prediction. Years later, the stock was north of that level on a split-adjusted value. Wood continues to bet heavily on Tesla with the Ark Innovation ETF (BATS:ARKK), Ark Next Generation ETF (BATS:ARKW) and Ark Autonomous Technology & Robotics ETF (BATS:ARKQ) counting
Tesla is the top holding in ARKK and ARKQ at 9.14% and 9.94% of assets, respectively. In ARKW, Tesla is the fourth-largest holding at 6.18% of assets at the time of writing.
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This article was previously published by Benzinga and has been updated.
