Source: Zhitong Finance

“Sister Wood” Cathie Wood (Cathie Wood), who can be called “Tesla's number one fan” and a “hardcore Musk supporter”, reiterated her opinion on Wednesday local time$Tesla (TSLA.US)$Target share price of up to $2000. Ark Investment Management, a well-known Wall Street investment agency founded and led by “Cathie Wood” Wood, has recently been buying shares of Tesla (TSLA.US), the electric vehicle hegemon led by Musk. “Cathie Wood Mu” expects that with the perfect combination of the three key technologies, Tesla's stock price will soar to 2,000 US dollars per share in the next few years. “Cathie Wood” even predicted that electric vehicles will contribute 75% to 85% of global new car sales within the next five years.

In recent weeks, the battle between the electric vehicle industry and global demand resistance has intensified, yet Ark Investment has been bucking the trend and buying Tesla shares. According to the data, Ark Investment purchased a total of 234,998 Tesla shares through its three exchange-traded funds (ETFs) on Tuesday, worth more than 39 million US dollars. Previously, it bought nearly 15 million US dollars of shares on Monday. Meanwhile, Tesla's delivery data for the first quarter was weak quarterly, and stocks were sold off by the market. The cumulative decline on Monday and Tuesday was over 6%.

Tesla produced 433,371 vehicles and delivered 386,810 vehicles in the first quarter, according to the latest figures released by Tesla on Tuesday. The delivery volume fell far short of the market's expectations of 449,080 vehicles. By comparison, Tesla delivered a total of 484,507 vehicles in the fourth quarter of last year, compared to 422,875 vehicles in the first quarter of last year.

Tesla said that part of the decline in deliveries was due to the early production capacity climbing phase of the upgraded Model 3 and the shutdown of production at some large factories. “Cathie Wood” Cathy Wood recently said in an interview that Tesla's sales and stock prices are under pressure due to demand pressure brought about by economic reasons, but she said that before 2030, people's ability to afford to buy electric vehicles will increase dramatically.

Wall Street is very bearish on Tesla's stock

Wall Street analysts have frequently lowered their expectations for Tesla's Q1 deliveries recently, but actual data revealed that analysts' general expectations of 449,000 vehicles, which were previously pessimistic, turned out to be “optimistic.”

Wedbush analyst Dan Ives, who has been optimistic about Tesla's stock price trend for a long time, commented after the Tesla delivery data was released: “Although we expected the delivery data for the first quarter to be terrible, this data is a disaster that is difficult to explain.”

Currently, Wall Street analysts' overall views on Tesla are rapidly deteriorating, mainly due to signs that electric vehicle sales are slowing down under pressure from high interest rates, and incentives from governments around the world are drying up. Wall Street analysts' average forecast for Tesla's stock price over the next 12 months is $196.90, but the lowest is $85 and the highest is $320. The difference between the two is huge. Wall Street analysts' general ratings have long been “hold” rather than “buy” ratings. Since the beginning of this year, Tesla's stock price has dropped by about 32% and is currently hovering around $168.

Analysts at Deutsche Bank said that Tesla's delivery data for the first quarter was far below Wall Street's minimum delivery expectations of 414,000 vehicles. “Furthermore, the gap between delivery and production volume confirms that “in addition to known production bottlenecks, there may also be a serious demand-side slump.” The agency rated Tesla stock as a “buy,” but the target price was only $200.

In March, Wall Street bank Wells Fargo downgraded Tesla's rating to the lowest level on the grounds that the company could cut prices further, which would affect its profits. Wells Fargo analyst Colin Langan downgraded Tesla's rating from “hold and wait” to “reduce holdings” and drastically cut its price target from $200 to $125. He said that Tesla's overvaluation compared to other “Big Seven US stocks” “may be a risk.”

Analyst Langan said in the research report: “We are seeing a downside risk in sales because the impact of price cuts is weakening. We are seeing headwinds from disappointing deliveries and more price cuts, which could lead to negative revisions to earnings per share.” He added: “Our estimates of earnings per share for 2024 and 2025 are 32% and 52% lower than consensus estimates, respectively.”

Cathy Wood, who has the title of “Tesla's number one fan”, supports Tesla's optimistic future

“Cathie Wood” Cathy Wood said in an interview with the media on Wednesday local time: “Consumers are under pressure to buy due to financial problems.” “Although these economic statistics suggest everything is fine, if you listen to these companies' reports one by one, most of them don't sound like these economic statistics suggest.”

Cathy Wood said in an interview that Tesla has been lowering prices to help consumers afford electric cars in the short term, but overall, electric cars will become more affordable in the next few years.

Wood said, “We believe what will happen in the next five years. You know this is the time frame for our investment. We believe that the cost of electric vehicles, the cost of ordinary electric vehicles, is expected to be cut in half. Tesla's new module manufacturing technology and artificial intelligence are an important part of this.”

Wood even predicts that within five years, 75% to 85% of global new car sales will be contributed by electric vehicles, while “Cathie Wood Mu” Wood reiterated that Tesla's stock price will reach 2,000 US dollars in 2027.

According to the data, Tesla is currently the second-largest shareholder in the ARK Innovation ETF, the flagship ETF under Ark Investment, second only to Coinbase (COIN.US) in weight. When Tesla's stock price was between $350 and $400, ARK Innovation sold some of its Tesla shares.

Although Tesla's stock price has fallen by about 60% from its all-time high, Wood stressed that now is “not the time to run away” for Tesla stock holders, “especially if you believe Tesla will be a leader in autonomous driving.” Wood said.

“Cathie Wood” Wood's high valuation of Tesla depends to a certain extent on Tesla's autonomous robot taxis, which are far from being realized. She predicts that by 2027, the robot taxi business will generate 130 billion US dollars in profit before interest, tax, depreciation, and amortization.

. According to Wood, Tesla's dominant position in robot taxis based on AI autonomous driving technology is not a “question of whether it will become a reality,” but a “question of when it will become a reality.” In her interview, she particularly emphasized the company's latest fully automated driving (FSD), and pointed out that this is a huge technological advance. Wood explained that the new version is more accurate and feels more like a senior driver driving an electric car.

Bullish Tesla analysts, represented by Adam Jonas (Adam Jonas) from Morgan Stanley, generally said that the expectation that Tesla's fully automated driving (FSD) service based on the AI supercomputing system will lead global autonomous driving technology is an important logic for them to be optimistic about Tesla stock.

According to Gene Munster, managing partner of Deep Water Asset Management, the FSD function is significant to Tesla's stock price, and FSD has the potential to significantly increase revenue. Munster predicts that although Tesla currently charges customers $199 per month, if the price of the FSD package is reduced to $100 per month and the software is licensed to 25% of the new cars and light trucks on the market, it could increase Tesla's revenue by about $4 billion. Munster anticipates that by the fifth year, the company's annual revenue may increase by about $20 billion.

Overall, “Cathie Wood” Wood emphasized in the interview that Tesla is a perfect fusion of three top technologies, namely robotics, energy storage, and AI.

“Tesla has the largest artificial intelligence project in the world,” she said. “We are in a volatile range, and we will remain in that zone until more and more analysts and investors understand how provocative the combination of these three technologies will be.”

As early as April 2023, “Cathie Wood” Wood set Tesla's target stock price until 2027 at $2,000 per share. “Cathie Wood”, who has been optimistic about Tesla for a long time, continues to expect Tesla's stock price to reach 2,000 US dollars with the booming development of autonomous robot taxis and Tesla's AI technology.

Specifically, Ark Investment, founded by “Sister Mu Tou” and is the CEO, predicts that in a bull market, the share price will be $2,500; in a bear market, the share price will be $1,400.

edit/lambor