TSLA Stock Price Predictions: Why Cathie Wood Is Betting on Tesla to Hit $2,600

TSLA Stock Price Predictions: Why Cathie Wood Is Betting on Tesla to Hit ,600

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With Tesla’s (NASDAQ:TSLA) crucial shareholder vote just one day away, Cathie Wood and her Ark Invest fund has raised its price target on TSLA stock to $2,600 by 2029. Indeed, the “disruptive” investor made the surprising decision to raise its estimations of TSLA just before the company’s shareholders vote on Chief Executive Elon Musk’s $56 billion payment package.

While the timing is certainly odd, Wood’s bullish thesis on Tesla isn’t. Indeed, Wood and her Ark fund have been long on Tesla for years now. Specifically, Wood believes Tesla will lead the charge towards autonomous vehicles and robotaxis.

Ark estimates that by 2029, nearly 90% of Tesla’s earnings will be from its yet nonexistent robotaxi business. In fact, Ark believes Tesla’s burgeoning robotaxi sector will come to grossly overshadow its EV business.

“We believe the robotaxi business will have much higher margins,” Ark Invest noted Wednesday. “We remain confident that the service will launch within the next five years.”

Interestingly, Ark Invest’s price target is contingent on a robotaxi business. Absent a robotaxi network, Ark believes TSLA’s price target would be about $350 per share, about double its current $179 price level.

TSLA stock remains the largest holding in Wood’s ARK Innovation ETF (NYSEACRA:ARKK), with an 11.09% weight.

TSLA Stock Surges Ahead of Payment Package Vote

It seems investors are encouraged by Wood’s latest endorsement of TSLA stock. Indeed, TSLA is up about 4% at the time of this writing.

Despite this, the stock may see a brutal reversal tomorrow as shareholders vote today on whether to grant Musk his 2018 compensation package.

As it stands, most analysts believe it is unlikely that shareholders will grant Musk the major windfall. With Musk threatening to leave the company, some believe Tesla stock may plummet Thursday in the aftermath of a rejection of the proposal.

This would further weigh down on an already crushed TSLA stock. TSLA is down almost 28% this year, shedding hundreds of billions in market capitalization as one the biggest losers of this year’s EV winter.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

With degrees in economics and journalism, Shrey Dua leverages his ample experience in media and reporting to contribute well-informed articles covering everything from financial regulation and the electric vehicle industry to the housing market and monetary policy. Shrey’s articles have featured in the likes of Morning Brew, Real Clear Markets, the Downline Podcast, and more.

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