Tesla Faces Tough Times
It’s been a challenging period for the electric vehicle pioneer Tesla (TSLA). While tech giants like Nvidia (NVDA) and Microsoft (MSFT) have soared in value, Tesla has stagnated, trading close to its level a year ago and down about 30% from its peak in the summer.
After Tesla released its quarterly financials in late January, showing below-expected earnings per share and revenue, the stock plummeted over 12% in a single day.
However, ARK Innovation ETF’s Cathie Wood gobbled up 377,000 shares of Tesla stock. This move left many investors puzzled
Investing Guru’s Playbook
Wood’s investment strategy involves maintaining faith in a company’s long-term prospects. By acquiring shares after a significant price drop, she aims to capitalize on a discount.
Continuously rebalancing her fund’s holdings, Wood sells overperforming stocks to buy underperforming ones. This strategic maneuver has contributed to ARK Innovation ETF yielding a 22% return this year.
Looking to the Future
Despite Tesla’s recent challenges, Wood remains optimistic about the company’s potential. She is wagering on Tesla fulfilling its vision of revolutionizing the automotive industry with autonomous driving technology and ubiquitous autonomous robots. Tesla’s heavy investment in AI and robotics is a testament to this ambition. Should the company deliver on its promise, the resulting revenue could validate a stock price significantly higher than its current value of roughly $200.
Maximizing the View
Investors keen on Wood’s strategy can directly purchase the ETF. For those seeking to amplify their outlook, leverage funds could provide an avenue. The AXS 2X Innovation ETF, aiming to return twice the daily return of ARK Innovation ETF, is one such option
Conversely, for traders skeptical of Wood’s approach, AXS offers the AXS Short Innovation Daily ETF, which seeks to deliver the inverse performance of ARK Innovation ETF.
TARK, just launched in May 2022, was honored as the Best ETF Launch at Benzinga’s 2023 Fintech Awards, underscoring the fund’s innovative nature and operational expertise.