Cathie Wood Sees Value In Tesla Wreckage As Ark Buys $13M Worth Of EV Giant's Stock, Loads Up On Bitcoin And Ethereum ETFs
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 19 2024
0mins
Should l Buy TSLA?
Source: Business Insider
- Tesla Stock Acquisition: Ark Investment Management increased its holdings in Tesla by purchasing 88,720 shares worth $13.30 million amidst Tesla's stock decline.
- Reasons for Stock Weakness: Tesla faced downward pressure due to concerns about layoffs, CEO compensation package approval, and uncertainties about electric vehicle deprioritization.
- Crypto Exposure Expansion: Ark refrained from trading crypto-related stocks like Coinbase and Robinhood, instead augmenting positions in ETFs with crypto exposure.
- Specific Crypto Investments: Ark invested in ARKZ, ARKB, and EETH ETFs, focusing on Ethereum and Bitcoin, with notable appreciation in ARKB since its inception.
- Bitcoin Performance: Bitcoin strengthened amid Middle East tensions, climbing by 0.72% to reach $62,141.40, while ARKK closed at $42.91 after a 0.26% fall.
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Analyst Views on TSLA
Wall Street analysts forecast TSLA stock price to fall
30 Analyst Rating
12 Buy
11 Hold
7 Sell
Hold
Current: 417.070
Low
25.28
Averages
401.93
High
600.00
Current: 417.070
Low
25.28
Averages
401.93
High
600.00
About TSLA
Tesla, Inc. designs, develops, manufactures, sells and leases high-performance fully electric vehicles and energy generation and storage systems, and offers services related to its products. Its segments include automotive, and energy generation and storage. The automotive segment includes the design, development, manufacturing, sales and leasing of high-performance fully electric vehicles, and sales of automotive regulatory credits. It also includes sales of used vehicles, non-warranty maintenance services and collisions, part sales, paid supercharging, insurance services revenue and retail merchandise sales. The energy generation and storage segment include the design, manufacture, installation, sales and leasing of solar energy generation and energy storage products and related services and sales of solar energy systems incentives. Its consumer vehicles include the Model 3, Y, S, X and Cybertruck. Its lithium-ion battery energy storage products include Powerwall and Megapack.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Investment Expansion: Tesla is also hiring silicon module process engineers in locations like Austin and Palo Alto, demonstrating a comprehensive expansion plan in chip manufacturing, alongside a commitment to invest approximately $2 billion into xAI to bolster its technological capabilities.
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- Earnings Quality Concerns: Despite the market's historically high valuation, the second-highest P/E ratio (39-41) raises concerns about earnings quality, as many companies rely on non-sustainable income sources to maintain profits, potentially undermining long-term investor confidence.
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- Increased Market Volatility: Despite a 16% rise in the S&P 500 in 2025, Trump's tariff policy triggered a 10.5% drop in just two days following its announcement on April 2, marking the fifth-largest decline since 1950, indicating the policy's detrimental impact on investor confidence.
- Earnings Quality Concerns: The tariffs imposed by Trump in 2018-2019 had a lasting negative effect on U.S. companies, with affected firms experiencing declines in labor productivity, employment, sales, and profits from 2019 to 2021, suggesting that current tariffs could replicate these adverse outcomes.
- Rising Inflation Pressure: Since the implementation of tariffs, the U.S. inflation rate has increased, with import duties raising production costs for certain businesses, leading to higher consumer prices and diminishing the likelihood of the Federal Reserve lowering interest rates, which could hinder economic growth.
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See More
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- Stagnant EV Business: Despite a reduction in average production costs, Tesla's net profit per vehicle fell to just $4,000 by the end of 2023, significantly lower than the $10,000 achieved in 2022, indicating the adverse impact of intensified competition on profitability.
- New Business Ventures: Tesla plans to launch household robots priced between $20,000 and $30,000 by the end of 2027, a move that may be driven by the stagnation of its EV business, highlighting the company's urgent need for diversification.
- Intensified Market Competition: Global EV sales reached 20.7 million in 2023, a 21% increase, with competitors like BYD and Volkswagen capturing significant market share, suggesting that Tesla's dominance in the EV market is being challenged.
- Uncertain Future Outlook: While Tesla's prospects in autonomous driving and solar energy are promising, market skepticism remains regarding the profitability and timelines of its new ventures, as analysts generally value TSLA stock at only $422.09, reflecting investor uncertainty about future growth.
See More
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- New Business Expansion: Tesla plans to launch household robots priced between $20,000 and $30,000 by the end of 2027, although the company's leadership in electric vehicles faces competitive pressures, and the profitability of these new ventures may take longer to materialize.
- Declining EV Profitability: As of the end of last year, Tesla's net profit per vehicle was only $4,000, significantly down from $10,000 in 2022, indicating severe challenges to profitability amid the ongoing EV price wars.
- Intensifying Market Competition: Global EV sales reached 20.7 million units in 2023, a 21% increase, with Tesla losing market share to competitors like BYD and Volkswagen, undermining its position in a rapidly growing market.
- Investor Confidence Shaken: Despite Musk's continued optimism about the future, analysts have set a target price of only $422.09 for Tesla stock, reflecting concerns about the outlook for its EV business, leading investors to adopt a cautious stance regarding the company's diversification strategy.
See More
