Ark Investment Management, owned by founder investor Cathy Wood, expects Tesla Inc. shares to touch $4600 by 2026.
The bright future of tesla share
Last year Ark saw the share of the EV maker hitting $3000 levels by 2025. It has updated its target price amidst new expectations built around Tesla’s capital efficiency and its prospective rob taxi business.
The bulls see the company’s share price rising to $5800 by 2026, whereas the bears suggest $2900 – still three times more than $1005.
Tasha Keeney, an analyst with Ark, wrote a blog post last week in which she says that though Ark’s expectations are tuned in for Tesla price in 2026, keeping the Tesla model conservative, they expect Tesla to behave like a mature company rather than a high growth company in 2026.
Cathy Wood has been a committed supporter of Tesla and its CEO Elon Musk. THE FLAGSHIP FUND, the ARK Innovation ETF, trimmed its exposure to Tesla’s holdings. Still, it has around 10% of Tesla in the fund as its largest holding. Tesla shares gained aroudn1.8% on Monday trading.
As per Bloomberg News, not everyone is optimistic about the Tesla stock, which saw a 40% rise in the last 12 months. David Trainer, the CEO of New Constructs, an investment research firm, sees the price of Tesla falling from as low as $ 150 to $ 200.
The trainer said that while Tesla enjoyed the first-mover advantage for a while, they no longer have that advantage now. There are several other EVs in the market that are competing successfully.
According to him, Cathy Woods is trying to make the Tesla stock look attractive and glittering to retail investors when they are missing the point where Tesla is presently positioned competitively.
The key driver to the higher expectations of Ark when it comes to Tesla is the greater demand for autonomous ride-hailing, whose market is expected to be between $ 11 million to $12 million as per Keeny’s estimates. Ark also has greater conviction in the self-driving business of Tesla, where the EV maker is expected to achieve 60% of the market value by 2026.
Another factor expected to help achieve the target is more capital efficiency. Tesla can hope to become by 2026 based on the decrease of capital expenditure of $84,000 in 2017 to $ 7,700 currently per incremental unit capacity.
In the meantime, the bitcoin holdings of Tesla also include Ark’s model but are not considered a critical forecast component, increasing the target proof by less than 5%.
Tesla can pursue other business opportunities not included in Ark’s forecast model, including artificial energy as a service, energy storage business, and a humanoid robot.
Ark’s model is open-sourced, which means that investors can input changes and simulate potential put comes.
