Ark Innovation ETF manager talks about huge opportunity still to come for Tesla.
Cathie Wood is famous for making bold predictions about innovations.
When she’s right, the results can be spectacular.
The fund manager of the Ark Inovation ETF (ARKK) – Get ARK Innovation ETF Report bet big on Tesla (TSLA) – Get Tesla Inc. Report several years ago, and rode it to eye popping gains greater than 300%. Lately, the times haven’t been as kind, and Ark is down 75% from its peak. Tesla too is down sharply, and Ark has trimmed its holdings, as inflation and interest rate fears have hammered shares.
But Wood is undeterred about her own fund or Tesla, as she made clear in a June 8 interview on Bloomberg.
In particular she indicated she’s not concerned that Tesla CEO Elon Musk is spreading himself too thin with his pursuit of Twitter (TWTR) – Get Twitter Inc. Report. Musk launched his $44 billion bid for the social media company earlier this spring, but has hinted he might pull out of the deal if he can’t get more information about the number of spam and bot accounts on the service.
Musk also runs SpaceX and its related Starlink satellite communications service, as well as the Boring Company, and Neuralink.
Asked if there was an element of “key man risk” with Musk, Wood replied “I think people have been saying that all along [about Musk] with Tesla because of SpaceX and Boring Company and Neuralink.” However, she’s not worried because Musk “is our renaissance man.”
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In addition, she said that Musk was unlikely to turn his attention away from Tesla anytime soon for a really big reason.
With this year’s opening of two additional Tesla manufacturing plants in Germany and Texas, “They’ve got that manufacturing scaling under control now,” Wood told Bloomberg.
“He doesn’t need to stick around [Tesla] for the EV side of it. He needs to stick around for the autonomous side.”
That’s because the nascent autonomous mobility market — putting artificial intelligence in charge of vehicles — is poised for astronomical growth, according to Wood.
“For Tesla and Cruise automation and Waymo this is the biggest transportation opportunity out there,” Wood said “It is, think about this, $10 trillion in revenue, versus zero now, by 2030.“
And that, Wood said, is her base case scenario. “I don’t think we’ve seen a bigger opportunity,” she added.
It’s enough that even the world’s richest man might find worth sticking around for.