Cathie Wood Stands By Tesla's $2,600 Price Target Despite 40% Stock Drop: 'It's Winner Take Most

ARK Invest CEO Cathie Woodmaintains her ambitious $2,600 price target for Tesla (NASDAQ:TSLA) by 2029—valuing the company at over $9 trillion—despite the stock’s near 41% decline since the beginning of the year.

“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 an $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%, according to Fortune.

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Wood's bullish outlook hasn’t translated into strong performance for her flagship $6 billion ARK Innovation ETF (nyse:ARKK), where Tesla represents the largest holding at 10.74%. The fund has gained just 2% over the past five years while the S&P 500 has nearly doubled.

ARKK is down more than 16% year-to-date.

However, retail investors added nearly $300 million to ARKK on Monday—its largest single-day inflow in two years, according to Bloomberg. It came despite the fund tumbling about 9% that day amid a broader market selloff.

Matt Maley, chief market strategist at Miller Tabak + Co., told Bloomberg that retail investors are buying tech stocks as the sector has taken a beating this year. The “buy-the-dip” mentality is strong, according to Bloomberg, particularly among those seeking Tesla exposure.

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Wood called Musk “the inventor of our age” and dismissed concerns that his role heading the Department of Government Efficiency would distract from Tesla. “He’s surrounded himself by businesspeople and engineers who want to work on the hardest projects in the world,” she said.

Beyond Tesla, Wood anticipates an “R&D explosion in health care,” with CRISPR Therapeutics AG (NASDAQ:CRSP) representing nearly 6% of ARKK’s portfolio. She compared President Donald Trump’s second term to the “Reagan revolution,” calling that era “the heyday, golden age of active management.”

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

Bloomberg noted that 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.

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This article Cathie Wood Stands By Tesla's $2,600 Price Target Despite 40% Stock Drop: 'It's Winner Take Most originally appeared on Benzinga.com

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