Despite Market Turbulence and Model 2 Rumors, Ark Invest Bolsters Tesla Holdings
Despite Tesla, Inc. (NASDAQ:TSLA) experiencing a 3.6% plunge amidst rumors regarding its Model 2, Cathie Wood’s Ark Invest remains steadfast in its support for the electric vehicle giant. In a move showcasing unwavering confidence, Ark Invest added $22 million worth of Tesla shares amid the market volatility.
Tesla’s shares saw a notable intraday decline of over 6% on Friday, later settling around 3% lower for the day. This decline followed a Reuters report suggesting the possibility of Tesla discontinuing its sub-$30,000 electric vehicle, although CEO Elon Musk refuted the claim on social media.
Despite the market reaction to the rumors, Cathie Wood’s Ark Invest seized the opportunity to increase its stake in Tesla. Through its actively managed exchange-traded funds, Ark purchased a total of 133,975 Tesla shares, valued at $22.09 million based on the closing price.
Ark’s commitment to Tesla underscores Wood’s firm belief in the company and its CEO, Elon Musk. With a $2,000 price target for Tesla by 2027, Ark Invest remains optimistic about the company’s prospects, particularly regarding its planned robotaxi services.
While some investors expressed concerns about Tesla’s decision to potentially shelve the low-end EV platform in favor of doubling down on full self-driving (FSD) software, others like Gene Munster from Deepwater Asset Management see it as a strategic move. Munster believes that being the first to achieve full autonomy at scale presents a significant advantage for Tesla, potentially leading to the deployment of robotaxis by 2027.
Ark Invest’s confidence in Tesla is further demonstrated by its recent increase in Tesla holdings. Throughout the week, Ark Invest accumulated $76 million worth of Tesla shares, reinforcing its position as one of the company’s prominent investors.
In addition to bolstering its Tesla holdings, Ark Invest continued its portfolio adjustments by selling off shares of Coinbase Global, Inc. (NASDAQ:COIN) and Robinhood Markets, Inc. (NASDAQ:HOOD). These strategic moves reflect Ark’s commitment to actively managing its portfolios in response to market dynamics.
As Tesla remains a cornerstone of Ark Invest’s portfolio, Wood’s firm conviction in the company’s future prospects continues to shape its investment strategy, even amidst market fluctuations.
