Leading tech investor Cathie Wood said she would be willing to sell her flagship fund’s massive stake in Tesla next year if the stock hits its $3,000 price target early, according to reports.
Cathie Wood, the chief executive of ARK Invest, spoke virtually at… the Morningstar Investor Conference Wednesday when she doubled up on Tesla, citing exposure to emerging technologies such as artificial intelligence.
ARK’s flagship fund, the
ARK Innovation ETF
(ticker: ARKK), outperformed most markets in 2020, with a total return of 152% last year. But it is down more than 5% so far in 2021 amid pressure from rising interest rates on the types of high-growth, innovation-focused companies it invests in.
(TSLA), ARKK’s largest holding company and accounting for more than 11% of its more than $21 billion fund, is up a comparable 3% in 2021 and 7.8% in the past year, according to data from FactSet. Tesla shares rose nearly 1% in pre-market trading in the US on Thursday.
Wood has a five-year price target on Tesla stock of $3,000 and said at the conference, “If nothing changed in our outlook and we got to $3,000 next year, I think we’d peel out,” she said. . , according to Bloomberg.
Wood also pushed back against bears, pointing to skyrocketing valuations — especially for tech companies — as evidence that the stock market is in a bubble.
“We are not in a bubble, I know that,” the fund manager said. Reuters. “But I do believe the market is starting to understand how deep some of these platform capabilities are and how sustainable and fast the growth rates will be.”
Wood referred to emerging technologies like artificial intelligence, which has the potential to help companies like Tesla further disrupt the auto industry with self-driving cars.
The head of ARK also said she expects the average price of electric vehicles (EVs) to be cheaper than gas-powered cars in the coming year, fueling the popularity of EVs. Wood said that by 2025, she estimates an average EV will cost $18,000, compared to $25,000 to $26,000 for a gas-powered car, according to Bloomberg.
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