Tesla (TSLA) should be valued like a tech company, and in trading it, treat the stock accordingly, says the founder and CEO of ARK Invest. Cathie Wood points out that Tesla robotaxis could be “the biggest AI project in the world.”
Tesla is more than an automaker
Cathie Wood of ARK Invest is one of the few who understands the essence of Tesla. The firm began to correctly predict the growth of the manufacturer’s shares back in the days when Wall Street had an extremely negative view of the company’s growth trajectory. Only a few years after that, analysts began to recognize Tesla, its growth potential, and its incomparable impact on several sectors. However, despite this, most analysts continue to see Tesla only as a car manufacturer, while this is far from reality. Tesla became the first company that produces cars to reach a market capitalization of $1 trillion, and this was only possible because the company is more than a mere automaker.
Tesla should be valued like a technology company
Recently, Wood was interviewed by Benzinga CEO Jason Raznick. She said Tesla’s valuation could be much higher than the current one. In addition, the company should trade more like a fast-growing technology stock than a car stock. Tesla is well known for its electric vehicles, but it also works in solar energy, energy storage, artificial intelligence, and is expanding into autonomous driving and robotics. That is why the company should trade like technology stocks, not traditional automaker stocks, which Tesla analysts and bears cannot understand, Wood said.
“That’s why they’re getting it wrong,” she said.
Autonomous taxi platforms could be “the biggest AI project in the world”
Tesla is actively working to create a Full Self-Driving (FSD) technology. When it is ready, the company will launch robotaxis. These are cars that can drive without drivers and bring money to their owners at a time when they are not using them. Wood is making a huge bet on Tesla’s development of this technology.
“Tesla, because of its positioning with AI, it is the only auto company or tech company that has designed its own chip for autonomous driving,” she said. According to Wood, autonomous taxi platforms could be “the biggest AI project in the world.”
She compared Tesla to Apple, which also created its own chip. “It has been taken a leaf from Apple’s book. Apple has redefined the cell phone market by designing a chip that turned the cell phone into a computer,” said Wood. At the same time, companies such as Motorola and Sony Ericsson, who were leaders in the market at that time, are now in a completely different position. “They didn’t define the market correctly, and neither have auto companies,” she said.
Wood said Tesla has its own chips and is pushing self-driving vehicles, which is important for the company’s future valuation. “This is not an auto play. This is an autonomous taxi platform play with software-as-a-service like margins,” Wood said. She noted that autonomous has 80%-plus gross margins for Tesla, which is important given its current normalized 20% gross margins.
