Tesla Stagnates
Tesla’s performance in the market has been less than stellar, in stark contrast to the soaring valuations of fellow market giants like Nvidia and Microsoft. While Nvidia has seen a remarkable 235% surge since last February, and Microsoft is up over 50%, the EV pioneer’s stock has remained flat, with little change from this time last year and a significant 30% downturn from its summer peak.
Following the release of its quarterly figures at the end of January, Tesla disappointed investors by falling short once again on both earnings per share and revenue. Consequently, the stock plummeted by over 12% in a single day.
In the midst of this downturn, Cathie Wood, an investing maven, astoundingly acquired 377,000 shares of Tesla for her ARK Innovation ETF. A move that has left many wondering, why?
Business As Usual
Wood’s buying spree is part of her usual investment strategy. She remains steadfast in her belief in the company’s long-term vision, strategically taking advantage of the stock’s discounted price following a substantial dip.
Consistently realigning her fund’s holdings, Wood divests from overperforming stocks while acquiring underperforming ones. This savvy maneuvering has contributed to ARKK’s impressive 22% return over the year.
Eyes On The Horizon
Despite its recent setbacks, Tesla continues to hold great promise. Wood is making a bold wager on the company’s ability to fulfill its vision. Tesla envisions a future where its autonomous driving technology dominates the automotive industry, alongside the proliferation of its autonomous robots. The company is aggressively investing in AI and robotics to bring this vision to fruition. If successful, the potential revenue generated could easily justify a stock price far beyond its current modest valuation of roughly $200.
Maximum Outlook
For traders who share Wood’s bullish outlook and wish to align with her fund, purchasing the ARK Innovation ETF directly is an option. Alternatively, for those looking to amplify their optimism, leveraged funds are a possibility. For instance, the award-winning AXS 2X Innovation ETF is designed to yield twice the daily return of ARKK.
Conversely, for traders hesitant to follow Wood’s lead, AXS offers a potential solution through the AXS Short Innovation Daily ETF, which endeavors to counteract the performance of ARKK. Notably, TARK, the leveraged fund, was the recipient of the esteemed title ‘Best ETF Launch’ at the 2023 Fintech Awards hosted by Benzinga, a testament to the meticulously executed strategies behind its operation since its launch in May 2022.
Photo by Neo Tan on Unsplash.
