Ark Invest’s finance guru Cathie Wood predicted a big tech stock will be boosted despite fears of a US recession. Wood said Tesla shares will quadruple to $4,600 by 2026.
Ark said last year that the electric vehicle maker was set to hit $3,000 by 2025, but has since updated its price target amid renewed expectations around new business and capital efficiency.
The company’s bull case suggests the price could rise to around $5,800 by 2026 and the bear case suggests $2,900, still around three times the current share price of $1,005.
“Although adjusted to our expectations for 2026, we believe our Tesla model is methodologically conservative,” Tasha Keeney, an analyst at Ark, wrote in a blog post last week.
“We assume that Tesla stock will trade as a mature company rather than a high-growth company in 2026.”
Wood has long been an ardent supporter of Tesla and its CEO, Elon Musk. While Ark Innovation’s flagship ETF cut its position in Tesla last month, the electric vehicle maker remains its largest holding, accounting for 10% of the fund. Tesla shares gained about 1.8% on Monday.
Ark has also increased his conviction in Tesla’s ability to achieve full autonomous driving, with the automaker’s prospective robotic taxi business contributing 60% of its expected value in 2026.
Another factor is the expectation that Tesla will become more capital efficient, Keeney wrote, noting that Tesla’s capex per unit of incremental capacity has fallen to $7,700 from $84,000 in 2017.
Meanwhile, Tesla’s bitcoin holdings are included in Ark’s model but not considered a key component of the forecast, raising the price target by less than 5%, Keeney wrote. Other business opportunities Tesla could pursue that are not included in the blueprint include an energy storage business, artificial intelligence as a service, and a humanoid robot.