ARK Invest CEO Cathie Wood believes Elon Musk’s public feud with President Donald Trump could ultimately benefit Tesla (TSLA), despite the immediate market chaos that wiped $152 billion from the company’s value in a single day. Wood’s contrarian perspective hinges on her observation that Musk “works really well under pressure” and has historically transformed adversity into opportunity.
The conflict erupted after Musk criticized Trump’s tax-and-spending bill, calling it an “abomination.” This prompted Trump to threaten the termination of government contracts for Musk’s companies. TSLA stock plummeted 14% last Thursday before staging a recovery, gaining back nearly all its losses within days as tensions appeared to cool and Musk deleted inflammatory posts targeting Trump.
Wood Remains Bullish on Musk
Wood acknowledges the significant risks facing Musk’s empire, given the government dependence across his ventures. SpaceX alone holds $22 billion in federal contracts, while Tesla benefits from electric vehicle (EV) subsidies and may face regulatory hurdles for its autonomous vehicle ambitions. Neuralink’s commercialization plans and xAI’s development could also suffer under a hostile regulatory environment.
The timing couldn’t be worse for Tesla, as the EV maker saw its auto sales plunge by 20% in Q1 amid intensifying Chinese competition and consumer backlash to Musk’s political activities. European sales declined nearly 50% year-over-year in April, highlighting Tesla’s vulnerability in key markets.
However, Wood sees potential for redemption through Musk’s track record of turning crises into comebacks. She notes he’s beginning to “disengage from government and being associated with one party,” potentially reducing brand damage. The recent robotaxi testing footage in Austin provided investors with renewed optimism about Tesla’s autonomous driving future, helping drive the stock’s recovery.
While the feud highlighted dangerous governance issues and Musk’s divided attention across multiple ventures, Wood’s bet is that pressure often brings out Musk’s best innovations. Whether this crisis catalyzes Tesla’s next breakthrough or marks the beginning of deeper troubles remains the defining question for investors navigating one of the market’s most volatile relationships.
All Eyes Are on Tesla’s Robotaxi Launch
Tesla is preparing to enter the robotaxi market with a tentative launch on June 22 in Austin, Texas, marking a pivotal moment for Musk’s long-promised autonomous driving vision. The service will begin with just 10-20 modified Model Y vehicles operating under “unsupervised” Full Self-Driving technology, with Musk emphasizing Tesla is being “super paranoid about safety” given the high-stakes nature of the deployment.
However, Tesla faces significant competitive pressure in Austin. According to a CNBC report, Waymo already operates a successful commercial service with Uber (UBER), achieving higher utilization rates than 99% of human drivers with approximately 100 vehicles. The Google (GOOG) (GOOGL) subsidiary’s sensor-rich approach contrasts sharply with Tesla’s vision-only strategy, raising questions about Tesla’s ability to match established safety standards.
The launch comes at a critical time for Tesla, which has repeatedly missed autonomous driving deadlines over the past decade while competitors gained substantial market advantages. With plans to expand from Austin to thousands of vehicles across multiple cities if successful, this limited pilot represents Tesla’s best opportunity to validate its autonomous technology and restore investor confidence in Musk’s robotaxi promises.
What Is the Target Price for TSLA Stock?
Tesla stock went public 15 years ago and has returned over 25,000% to shareholders since. However, TSLA stock is down 33% from all-time highs and shares are down nearly 20% in 2025.
Out of the 41 analysts covering TSLA stock, 14 recommend “Strong Buy,” two recommend “Moderate Buy,” 15 recommend “Hold,” and 10 recommend “Strong Sell.” The average target price for Tesla stock is just below $292, implying 10% downside potential from here.
