Ark Investment Management has made waves with its bullish calls on stocks at the forefront of innovation, including Tesla, the EV giant. With projections of Tesla’s stock potentially reaching $2,600 by 2029, representing a remarkable 1,366% increase from current levels, investors are eager to see if these forecasts hold water.
Image source: Tesla.
Tesla’s Uphill Battle in the Short Term
Despite delivering a record 1.8 million EVs in 2023, Tesla faced challenges like slashing prices and missing Musk’s ambitious sales growth targets. The company grappled with a slowdown in EV demand, intensified competition, and a cautious consumer market. These headwinds foreshadow a bumpy road ahead for Tesla’s growth trajectory.
Ark’s Bet on Tesla’s AI Potential
Ark’s optimistic outlook centers around Tesla’s full self-driving (FSD) technology, expected to become a revenue-driving force by 2029. With a promising FSD technology boasting impressive safety records and revenue streams, Tesla aims to revolutionize the autonomous driving sector. Ark’s projections anchor on the success of Tesla’s FSD and the Cybercab platform, anticipating a seismic shift in Tesla’s revenue mix by 2029.
The Hurdles in Tesla’s Quest for $2,600
Although Ark’s forecasts paint a rosy picture for Tesla’s future, the current challenges facing the company raise skepticism about hitting the ambitious $2,600 price target. With Tesla’s premium valuation overshadowing its earnings performance, meeting the colossal revenue growth expectations seems like an uphill battle. Musk’s cautious optimism about Ark’s projections hints at the mountainous tasks Tesla needs to overcome to reach for the sky.
The uncertainty surrounding the commercial viability of FSD and the Cybercab poses significant risks to Ark’s bullish outlook. Until these technologies gain widespread approval and consumer acceptance, Tesla’s path to $2,600 remains uncertain. In a more conservative scenario, Ark still sees potential for Tesla stock to climb to $350 by 2029, driven by its EV business and traditional ride-hailing operations.