Brendan McDermid/Reuters
- Cathie Wood's Ark Invest would sell Tesla if it hit its five-year $3,000 price target by next year.
- "If nothing were to change in our outlook and we got to $3,000 next year, my guess is that we would be peeling out of it," Wood said on Wednesday.
- Shares of Tesla would have to surge 299% from current levels to hit Wood's price target.
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When asked about her sell discipline at a Morningstar investment conference on Wednesday, Cathie Wood of Ark Invest detailed when she would begin to sell shares of Ark Invest's largest holding: Tesla.
"If nothing were to change in our outlook and we got to $3,000 next year, my guess is that we would be peeling out of it," Wood said, according to Bloomberg. Tesla's share price of about $752 means the EV maker would need to surge 299% from current levels to reach Ark's price 5-year price target.
Wood remains bullish on Tesla, expecting the company to benefit from significant demand as the average cost of electric vehicles continues to drop in the coming years. She believes the average price of an EV will fall below that of a gas-powered car within the next year or so, and that by 2025, an EV could cost just $18,000 compared to about $25,000 for a gas-powered car.
Ark Invest has already sold nearly $300 million worth of Tesla amid a small rally this month, but those sales represent just a small percentage of its more than $2 billion stake in the company.
Wood reiterated at the conference her view that the stock market is not in a bubble despite its near-record highs, as various platform technologies begin to converge and compound at an increasingly rapid rate. Those technologies include robotics, artificial intelligence, and genomics, among others.
Shares of Tesla are up 7% year-to-date, while Ark's flagship Disruptive Innovation fund is down 5%.