Ark Invest, led by Cathie Wood, recently sold 181,294 shares of Tesla stock, trimming its largest holding despite a long-term bullish outlook. The move reduces Tesla's weighting in the portfolio to 7% from 8.5% last quarter. Analysts note Tesla faces a challenging year with expected sales declines and a high valuation multiple.
According to recent filings, Ark Invest unloaded 181,294 shares of Tesla (TSLA 3.36%), a decision that stands out given Cathie Wood's longstanding optimism about the company. Wood maintains a long-term price target of $2,600 for Tesla stock, signaling continued faith in its future potential.
Tesla remains Ark Invest's top holding, with over 3 million shares valued at approximately $1 billion. Prior to the sale, the position accounted for 8.5% of the portfolio; it now stands at 7%. Such adjustments are routine for growth-oriented funds like Ark, which navigate significant value swings in their investments. The sale does not necessarily indicate a bearish shift, as large funds frequently rebalance to manage risk.
The author of the analysis suggests Wood views Tesla as undervalued over the long term but potentially overpriced in the near term. Tesla's shares trade at 17 times sales, a substantial premium compared to other electric vehicle stocks. Analysts anticipate a sales drop for Tesla, forecasting a difficult year ahead due to market pressures.
While the trim may reflect concerns about short-term valuation relative to performance, Wood's overall bullish stance on Tesla persists. This adjustment highlights the balance funds strike between conviction and portfolio discipline amid volatile market conditions.