- Tesla jumped as much as 6% on Monday after Cathie Wood released a new $3,000 price target for the EV manufacturer.
- Much of the upside potential for Tesla is predicated on its ability to launch an autonomous robotaxi service, according to Ark.
- In a bear and bull case scenario, Ark expects Tesla to trade in between $1,400 and $4,000 per share, respectively.
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Shares of Tesla jumped as much as 6% on Monday after Ark Invest's Cathie Wood assigned a new 2025 price target of $3,000 for the EV manufacturer, representing potential upside of 359% from Friday's close.
That's a sizable increase from Ark's previous 2024 price target of $1,400, and would give Tesla a valuation of about $3 trillion. Investors are taking notice due to the accuracy of Wood's previous eye-popping price predictions for Tesla stock.
The price target incorporates expectations that Tesla will launch an autonomous robotaxi service built upon its full self-driving tech platform, which could bring in as much as $327 billion in revenue, according to Ark.
"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," Ark explained.
In its bear case, Ark expects Tesla to trade to $1,500 per share as it sells 5 million cars per year. In its bull case, Ark expects Tesla to trade to $4,000 per share as it sells upwards of 10 million cars per year. In 2020, Tesla sold about 500,000 vehicles.
The valuation model utilized by Ark incorporates Tesla's relatively new insurance business, but doesn't include its energy storage and solar business, nor its $1.5 billion allocation to bitcoin.
Tesla remains the largest holding for Ark Invest across all of its ETF strategies, and this isn't the first time the investment management firm had a sky-high price target for Tesla.
In 2018, Wood said Tesla would hit $4,000 when the stock was trading at a split-adjusted price of about $250. The stock went on to trade at a split-adjusted price of $4,500 in early 2021, two years ahead of schedule.
