ARK Invest, in a post on their website earlier last week said that they see a 50% possibility of Tesla stocks quoting a price of $3,000 by 2025, which is their base case for the stock.
Elon Musk’s Tesla has had a strong run on Wall Street so far amid the pandemic. In the last one year, the stock price has jumped 671% to now trade at $670 per share. But, in the post-pandemic world, it could surge further and going by Cathie Wood’s ARK Invest, the stock could skyrocket another 347% and reach $3,000 apiece in 2025. Tesla’s share price is currently in the negative, going by year-to-date returns, falling 8% since the beginning of the year, underperforming the NASDAQ Composite index.
ARK Invest, in a post on their website earlier last week said that they see a 50% possibility of Tesla stocks quoting a price of $3,000 by 2025, which is their base case for the stock. They see a 25% possibility of the stock price hitting $1,500 in 2025, their bear case target and the bull case target is set at $4,000 per share.
In their base case scenario, ARK Invest expects Tesla to sell 5 million cars and 10 million in the bull case. The note further added that there is a 50% possibility of Tesla delivering fully autonomous driving in the next five years. With a huge database building at Tesla from its vehicles, ARK believes that robotaxis could now be viable. “If successful, Tesla could scale its robotaxi service rapidly, allocating the additional cash in turn to manufacturing capacity serving its autonomous network. If 60% of its vehicles equipped with Autopilot were to serve as robotaxis, Tesla could generate an additional $160 billion in EBITDA in 2025,” ARK Invest said.
ARK has factored in the launch of a human-driven ride-hail service by Tesla in its bear case. “In preparation for its robotaxi service, Tesla could launch a human-driven ride-hail network first, delivering a highly profitable recurring revenue stream and limiting the downside of a failed autonomous service,” they said. Ride-hailing could add another $500 to the price target, according to ARK.
Cathie Wood’s ARK was among the ‘dip buyers’ when Tesla’s share price plummeted in the first week of March. The price target set by ARK, however, does not factor in Tesla’s Bitcoin purchase and the impact that could have on the stock going forward. Tesla now has $1.5 billion worth of Bitcoin on its balance sheet.