Over the last five years, Ark Invest CEO Cathie Wood has been one of the biggest bulls on electric vehicle company Tesla Inc TSLA. Here’s a look at how much an investment in Tesla could be worth in the next four years if it hits Wood’s price target.
What Happened: Wood was laughed at when she issued a $4,000 price target on Tesla back in 2018.
At the time, the highest price target from analysts was $500 and shares were trading at $346.
“If we’re right, this stock in our models is going to $5,000. If we’re wrong and all they do is electric, our bear case is $600,” Wood said.
Fast forward three years to January 2021 and Tesla shares hit the $4,000 price target when they hit $800 a share, which came after a five-for-one split in 2020.
The big question for investors is if Wood can strike magic again with a new forward looking price target on Tesla.
Wood is calling for Tesla shares to hit $4,600 in 2026 thanks to a push into autonomous robotaxi vehicles.
“Our five-year price target has increased by more than 50% to $4,600.”
The previous Tesla price target was $3,000 by the year 2025.
Ark Invest laid out a bull case of shares hitting $5,800 in 2026 and a bear case of shares hitting $2,900 in 2026.
The model includes robotaxis increasing the company’s total addressable market and improving margins.
Here’s a look at what Tesla hitting the price target could mean.
Investing $1,000 In Tesla Now: A $1,000 investment in Tesla today could buy 1.41 shares, based on the price of $709.81 at the time of writing.
If Tesla can hit Wood’s price target of $4,600 in 2026, the $1,000 investment would be wroth $6,486. This represents a potential return of 548.6% over the next four years, representing an average annual return of 137.2%.
If Tesla hits the best case scenario for Ark Funds by 2026 and nails a $5,800 price target, the $1,000 investment would be worth $8,178.
If Tesla hits the low bear case price target of $2,900 by 2026, the $1,000 investment would be worth $4,089.
Wood and Ark Funds are betting big on the future success of Tesla. The electric vehicle company is the largest holding in the Ark Innovation ETF ARKK at 8.8% of assets and in the Ark Autonomous Technology & Robotics ETF ARKQ at 8.9% of assets. Tesla is the third largest holding in the Ark Next Generation Internet ETF (NYSE: ARKW) at 7.4% of assets.
Photo courtesy of Tesla.
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