$TSLA: ARK Invest CEO Cathie Wood Explains Why Her Firm Expects Tesla Share Price to Hit $2600 by 2029

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As an experienced financial analyst, I find Cathie Wood’s bullish outlook on Tesla compelling. Her perspective is based on solid reasoning, with a focus on Tesla’s potential in autonomous mobility and the significant revenue generation from this business model.

I, as a researcher, reported that on June 13, 2024, I had the opportunity to appear on CNBC’s “Squawk Box” program. During my interview, I discussed the future prospects of Tesla Inc. (NASDAQ: TSLA) and shared ARK Invest’s five-year price target for the stock.

As a crypto investor following Cathie Wood’s insights, I was intrigued by her take on the recent Tesla shareholder vote. She started by acknowledging the significance of the decisions made, particularly regarding Elon Musk’s compensation and the relocation of Tesla’s legal home from Delaware to Texas. I was surprised, just like Wood, to see large institutional investors rallying behind Musk.

As an analyst at ARK Invest, I’m excited to share our latest perspective on Tesla’s future price target. By 2029, we forecast Tesla’s shares to reach $2600, a goal driven primarily by the success of their autonomous taxi platform. Picturing this platform functioning under a Software-as-a-Service (SaaS) model, I see recurring revenue generated from each mile traveled by these self-driving cars. The potential for increased profitability is substantial, with gross margins in the SaaS industry reaching approximately 80%, far surpassing the current 16% margin in the automotive sector.

Expert: Wood delved into the vast possibilities and repercussions of autonomous mobility, referring to it as the most extensive AI endeavor globally. She underscored the remarkable progress Tesla has made in its Full Self-Driving (FSD) technology, leading to a substantial enhancement in safety statistics. Based on ARK’s investigation, Tesla cars outfitted with FSD exhibit fewer accidents per mile compared to typical vehicles.

As a crypto investor, I’ve learned that regulatory challenges can be a significant obstacle in any innovative industry, including autonomous transportation. Elon Musk is optimistic about having an autonomous taxi network up and running within the next few years, but securing regulatory approval remains a crucial step. However, there seems to be a shift in the attitude of public officials towards autonomous vehicles. For instance, Pete Buttigieg, the U.S. Secretary of Transportation, has recently expressed openness to the concept, recognizing that removing human drivers could lead to substantial safety improvements on our roads.

Elon Musk, CEO of Tesla, revealed on Wednesday night that shareholders are likely to endorse his controversial $56 billion remuneration package and a proposition to re-register the electric car manufacturer as a Texas corporation.

I’m thrilled to report that both shareholder proposals regarding Tesla are receiving strong approval from the voting community! Your backing means a lot to me as we move forward with these important initiatives.

— Elon Musk (@elonmusk) June 13, 2024

This news seems to have help Tesla stock, which is up nearly 4% today (as of 10:34 a.m. ET).

Yesterday, ARK Invest analysts unveiled their latest report, projecting Tesla shares could reach an estimated value of $2,600 by 2029. This projection was derived from their revised Tesla model, which is publicly accessible. The forecast incorporates a spectrum of possibilities, with optimistic expectations suggesting a share price as high as $3,100 and more conservative estimates predicting a value of $2,000 per share. The model employs statistical distributions for 45 distinct variables to generate multiple potential outcomes regarding Tesla’s future growth and stock evaluation.

According to the report, around 90% of Tesla’s market worth and profits are projected to stem from its robotaxi business by the year 2029. In comparison, electric vehicles are expected to contribute approximately 25% of total sales and only around 10% of earnings. ARK Invest posits that the robotaxi segment will generate substantially larger profit margins.

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2024-06-13 17:56