On July 13, in the monthly series "In the Know", well-known investor Cathie Wood pointed out that Tesla's self-driving taxi project has huge market potential, and its stock price is expected to increase by up to ten times.

She said: Most of Tesla's business value comes from Robotaxi (self-driving taxi), which will change Tesla's business model: from the current one-time income from selling electric vehicles to recurring income from RoboTaxi.

Musk's political inclination helps Tesla's stock rise

On Tuesday, Tesla's stock price rose, and the stock price rose and fell, and finally closed up 1.6% to $256.56 per share. So far this year, Tesla's stock price has risen by 3.28%. Analysts said that Musk's support for Trump has played a role in promoting the rise of Tesla's stock price, which will help Tesla gain more recognition among conservative groups.

In fact, Tesla has only recently shown its edge. In the first half of this year, Tesla was the only company among the famous "Big Seven" that lost money, while Microsoft, Nvidia, Apple, Amazon, Alphabet and Meta, which are also the Big Seven, had an average increase of about 53% in 2024 as of July 8, far ahead. However, Tesla successfully turned losses into profits after an amazing ten-day rise.

Source: Bloomberg

Robotaxi: A new engine for stock price increases?

Wood sees the ecosystem of self-driving taxis as a huge global market opportunity, estimating its value between $8 trillion and $10 trillion. She believes that platform providers like Tesla have the potential to occupy half of this market. In an interview with David Ingles of Bloomberg TV and Rebecca Sin of Bloomberg Industry Research, she pointed out that investors are not only looking at Tesla as an electric car manufacturer, but are beginning to consider its potential in the field of self-driving taxis.

In fact, Wood has always been a staunch supporter of Tesla, which is also the largest holding in the Ark Innovation ETF. Although the fund is down nearly 9% this year and its assets have shrunk by about a third, partly due to investor redemptions, it still outperforms the S&P 500's 18% gain. Wood is known for her bold predictions, such as her prediction that the price of Bitcoin will reach $1.48 million by 2030.

Wood believes that the self-driving taxi network will be a "winner-takes-all" market, and the company that can provide the safest and fastest service will occupy the largest market share. She expects such a company to be able to earn 30% to 50% of the revenue share from fleet owners on its platform, resulting in "explosive" cash flow and profit margins of more than 50%. This is very different from the traditional car manufacturing and sales model. She also said that what many people don't realize is the development potential, expansion speed and profitability of the self-driving taxi network. She expects Tesla to take the lead in the US market.

Tesla's weight in the $6.5 billion ARK Innovation ETF fund exceeded 15% last week. Wood noted that Ark usually does not increase its holdings once the holding reaches 10%. Although the holding ratio may increase as the stock price rises, the company usually starts selling before the stock price reaches a certain level. Wood revealed that Ark has partially taken profits on Tesla but allowed its stock price to continue to rise because they expect Tesla to soon release a lot of new information about the self-driving taxi project.

In addition, Wood is skeptical of Nvidia's valuation. Ark bought Nvidia shares at $4 per share in 2014 and held until its share price was close to $40 after stock split adjustment. Ark sold most of its holdings before Nvidia's stock price soared last year. Wood believes that investors who drove Nvidia's stock price up did not take into account that it would take time for companies to adapt to transformative artificial intelligence technology, and she believes that the increase and speed of the stock price are too aggressive.

How to conduct investment transactions on uSMART:

After logging into the uSMART SG APP, click "Search" from the top right of the page, enter the target code, such as "TSLA", and enter the details page to learn about the transaction details and historical trends. Click "Trade" in the lower right corner, select the "Buy/Sell" function, and finally fill in the transaction conditions and submit the order; the picture operation instructions are as follows:

Source：uSMART SG

Follow us

Find us on Twitter, Instagram, YouTube, and TikTok for frequent updates on all things investing.

Have a financial topic you would like to discuss? Head over to the uSMART Community to share your thoughts and insights about the market! Click the picture below to download and explore uSMART app！

Important Notice and Disclaimer:

We have based this article on our internal research and information available to the public from sources we believe to be reliable. While we have taken all reasonable care in preparing this article, we do not represent the information contained in this article is accurate or complete and we accept no responsibility for errors of fact or for any opinion expressed in this article. Opinions, projections and estimates reflect our assessments as of the article date and are subject to change. We have no obligation to notify you or anyone of any such change. You must make your own independent judgment with respect to any matter contained in this article. Neither we or our respective directors, officers or employees will be responsible for any losses or damages which any person may suffer or incur as a result of relying upon anything stated or omitted from this article.

This document should not be construed in any jurisdiction as constituting an offer, solicitation, recommendation, inducement, endorsement, opinion, or guarantee to purchase, sell, or trade any securities, financial products, or instruments or to engage in any investment or any transaction of any kind, nor is there any intention to solicit or invite the purchase or sale of any securities.

The value of these securities and the income from them may fall or rise. Your investment is subject to investment risk, including loss of income and capital invested. Past performance figures as well as any projection or forecast used in this article is not indicative of its future performance.

This advertisement has not been reviewed by the Monetary Authority of Singapore