ARK Invest CEO Cathie Wood maintains her ambitious $2600 price target for Tesla TSLA

ARK Invest CEO Cathie Wood maintains her ambitious $2600 price target for Tesla TSLA by 2029—valuing the company at over $9 trillion—despite the stock's near 40% decline since the beginning of the year.

ARK Invest CEO Cathie Wood is known for her bullish outlooks and bold price targets. While many analysts have slashed their expectations for the year ahead, especially in the turbulent tech sector, Wood remains focused on the long-term potential of her favorite stocks.

One stock that continues to hold a special place in her portfolio is Tesla (NASDAQ:TSLA). Despite the stock's nearly 41% decline since the beginning of the year and a staggering 70% decrease from its 2021 highs, Wood maintains her ambitious $2,600 price target by 2029, which would value the company at over $9 trillion.

"It's winner take most," Wood said of Tesla's position in the autonomous vehicle race during Bloomberg's "Odd Lots" podcast. "And we do believe that Tesla will be and is in the pole position here in the United States."

Wood sees robotaxis as a $8 trillion to $10 trillion opportunity that could transform Tesla from an auto manufacturer to a software company. She predicts autonomous vehicles will boost Tesla's gross margins from the current 16% to up to 90%.

"If you think about a service like Uber (NYSE:UBER) or Lyft (NASDAQ:LYFT), they have 70% to 90% gross margins," explained Wood. "So will a service like a robotaxi have?"

The interviewer noted that such a scenario would create a company with a market cap larger than the entire U.S. stock market.

"Well, Apple (NASDAQ:AAPL) is getting close," responded Wood.

Retail investors poured nearly $300 million into the flagship ARK Innovation ETF (NYSE:ARKK) on Monday, marking its largest single-day inflow in two years, according to Bloomberg. This influx came despite the fund tumbling about 9% that day amid a broader market selloff.

Tech stocks have taken a beating this year, and many retail investors are buying into the sector, stated chief market strategist at Miller Tabak + Co., Matt Maley, to Bloomberg. The "buy-the-dip" mentality is strong, particularly among those seeking Tesla exposure.

"We saw some large outflows from equities in the first half of the year, but we've seen some big retail money flows into stocks this year," said Maley. "That could be part of the story."

However, ARKK has faced difficulties in recent times. Over the past five years, the fund has gained just 2%, compared to the S&P 500's nearly 180% increase. Moreover, ARKK is down more than 16% year-to-date.

Despite Monday's massive inflow, ARKK hasn't seen a monthly net positive since December 2023, according to Bloomberg.

Many of ARKK's top holdings from November 2021 remain unchanged, including Tesla, Roku (NASDAQ:ROKU), Coinbase Global (NASDAQ:COIN), and Shopify (NYSE:SHOP), none of which have kept pace with the broader market since then.

Those who bought stock in the money-losing startups that ARKK holds, such as biomedical company CRISPR Therapeutics (NASDAQ:CRISPR), have seen even steeper declines.

"If you look at the startups, they've had a tougher time," said Frank Keogh, a professor of finance at the University of Baltimore, to Bloomberg. "But if you look at the major holdings, they've done okay, and they're not the riskiest part of the portfolio."

While the massive single-day inflow into ARKK is noteworthy, it's important to consider the broader context of market trends and investor behavior. As the year progresses, it will be interesting to observe how ARKK performs and whether retail investors continue to show such strong interest in the fund.output: A risky and highly concentrated exchange-traded fund (ETF) focused on innovation, the $6 billion flagship ARK Innovation ETF (NYSE:ARKK) from ARK Invest, has become a favorite among retail investors.

The fund, which counts Tesla (NASDAQ:TSLA) as its largest holding with a 10.74% weighting, saw an impressive $299.6 million in net inflows on Monday, making it the largest single-day inflow in two years.

This influx came despite the fund tumbling 8.9% that day, continuing a broader market selloff that saw the S&P 500 decline by 1.5%.

However, ARKK is known for its volatility, and the fund has faced difficulties in recent times. Over the past five years, the fund has gained just 2%, compared to the S&P 500's nearly 180% increase. Moreover, ARKK is down more than 16% year-to-date.

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