Cathie Wood is buying Tesla Inc.’s dip even as Wall Street stocks tumble.
The fund manager picked up nearly 690,000 shares of the electric vehicle maker through two exchange-traded funds managed by his firm ARK Investment Management in January. According to Bloomberg calculations based on closing stock prices, ETFs spent about $141 million on stocks.
Wood has been a longtime Tesla bull, but had mostly been selling shares for three consecutive quarters before the current buying spree. Its flagship ARK Innovation ETF (ticker ARKK) and ARK Next Generation Internet ETF (ARKW) have Tesla as their third- and sixth-largest holdings, respectively.
Tesla has lost 25% this month as the auto industry warns of collapsing demand for electric vehicles and Wall Street analysts scale back expectations for the stock. Wood’s flagship fund fell nearly 10%, after gaining 68% in 2023.
Tesla shares fell after Wednesday’s fourth-quarter earnings report, when the company said it expects to expand at a “significantly slower” rate in 2024. Following the results, Wood bought more than 360,000 shares on Thursday and Friday.
Wood is a longtime fan of Elon Musk’s electric vehicle company. ARK’s research team expects the stock to reach $2,000 in 2027, with Tesla’s robotaxi business a key driver. The investor often claims that his company backs companies ready to change the world and has a five-year investment period.
“We believe this shows conviction in the long-term story and believe many investors have been waiting for a buying opportunity after TSLA shares more than doubled last year,” said Garrett Nelson, vice president and senior equity analyst at CFRA Research . “They are seizing this opportunity now with the sell-off in the stock year-to-date.”