The aftermath of a rather lackluster fourth-quarter and full-year 2023 earnings report saw Tesla (NASDAQ: TSLA) shares plummet by 12% on Jan. 25, and continue to languish over 50% below previous highs. As macroeconomic headwinds take shape and the electric vehicle industry braces for limited growth in the near term, Tesla investors find themselves in new territory, reevaluating their expectations.
However, famed investor Cathie Wood, undeterred by the sell-off, seized the opportunity to amass approximately 377,000 shares, inflating Ark’s total position to a value of $796 million, representing about 6% of its entire portfolio.
The AI-Driven Future
Fascinatingly, Wood’s keen interest in Tesla isn’t solely due to its electric vehicle success, but is primarily focused on its artificial intelligence potential, a conviction stemming from an interview on CNBC in November 2023, where she dubbed Tesla as the “biggest AI play” in the current market. Delving deeper, it becomes increasingly evident why Wood, along with other AI enthusiasts, are exceedingly bullish about Tesla’s prospects in the domain of AI.
Riding the Wave of Autonomous Driven Taxis
Wood’s fervor surrounding Tesla’s AI prospects predominantly revolves around autonomous driving. Tesla achieved a significant breakthrough in 2023 by harnessing artificial intelligence neural networks to guide vehicle actions, replacing manual coding by software engineers. Musk envisions the launch of a robotaxi business in the near future, predicting overwhelming demand and envisaging its potential to revolutionize society and significantly enhance the company’s financial standing. A Monte Carlo simulation revealed that a successful robotaxi operation could elevate Tesla’s revenue to unprecedented heights, potentially catapulting the company’s share price to astonishing levels.
Building the Robot of the Future
Despite Wood’s current focus on the potential derived from robotaxis, she remains open to the long-term promise packed within Tesla’s humanoid robot, Optimus. Designed to shoulder hazardous or repetitive tasks currently carried out by humans, Optimus has the potential to disrupt multiple industries, with Musk targeting commercial availability by 2025, bolstering Tesla’s future revenue streams.
Tesla’s Secret Weapon
Setting Tesla apart from other AI-focused companies is its supercomputer Dojo, an in-house creation engineered to process enormous volumes of driving data from Tesla vehicles across the globe. As Dojo’s capabilities continue to evolve, Musk’s ambition to make it the most potent supercomputer globally, coupled with Wood’s unwavering confidence, positions Tesla to lead the AI revolution.
Where to invest $1,000 right now
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for two decades, Motley Fool Stock Advisor, has more than tripled the market.*
They just revealed what they believe are the 10 best stocks for investors to buy right now… and Tesla made the list — but there are 9 other stocks you may be overlooking.
See the 10 stocks
*Stock Advisor returns as of February 12, 2024
RJ Fulton has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
