Cathie Wood Sells Over $59M of Tesla Stock Despite Wedbush Seeing a $1T AI Opportunity for the Firm

Cathie Wood's Ark Invest has continued to sell a significant number of Tesla (Nasdaq: TSLA) shares, a move that could raise eyebrows among investors, especially considering her long-standing bullish stance on the electric vehicle maker and her vocal support for Elon Musk.

According to recent trading disclosures, the ARK Innovation ETF sold 97,268 shares of Tesla, while the ARK Next Generation Internet ETF offloaded 27,599 shares of the EV giant. In total, Wood's funds sold 124,867 Tesla shares on Monday, equating to approximately $59.3 million (£44.2 million) based on the latest closing price of $475.31 (£354.80) per share.

While some analysts suggest that this sale does not reflect a change in her long-term outlook for Tesla, her decision coincides with a recent downgrade from Morgan Stanley. The bank cut its rating on the stock to 'equal weight' from 'overweight', citing concerns that Tesla's shares are overvalued and investors might be better served waiting for a more attractive entry point.

This downgrade follows comments from Michael Burry of 'The Big Short', who described Tesla shares as 'ridiculously overvalued'. Burry also pointed out that Tesla dilutes its stock by approximately 3.6% annually but has yet to implement share buybacks to offset this dilution.

Cathie Wood's Price Target for Tesla

Despite recent sell-offs, Wood remains bullish on Tesla's long-term prospects. She recently predicted that Tesla shares could reach as high as $2,600 (£1,940) per share by 2030, implying an upside of over 400% from current levels and average annual gains of around 50% for the rest of this decade.

Ark Invest maintains a strong bullish outlook on Tesla's robotaxi programme and the development of Optimus robots. Despite her recent sales, Tesla remains the largest holding across Ark's ETFs, accounting for more than 10% of the portfolio.

Wood continues to express unwavering confidence in Musk's leadership. She has described him as the 'Thomas Edison of our age' and highlighted that he achieved a significant milestone earlier than markets anticipated. She believes that Musk's ongoing success across his ventures is a win for everyone involved.

Wedbush's Dan Ives Sees 2026 as a Pivotal Year for Tesla

Meanwhile, Wedbush analyst Dan Ives has offered an optimistic outlook for Tesla's future. He recently stated that the company is making significant strides in advancing its autonomous driving and robotics initiatives, with 2026 poised to be a critical year.

Ives expects Tesla to launch robotaxis in over 30 US cities in 2026, estimating that the AI opportunity alone could be worth at least $1 trillion (£746.4 billion). He believes that regulatory hurdles surrounding full-self driving (FSD) are likely to ease early next year under the current administration, unlocking substantial value for Tesla as volume production ramps up and FSD penetration increases within its customer base.

Overall, Ives predicts that Tesla could dominate around 70% of the global autonomous vehicle market over the next decade, with FSD penetration potentially reaching 50%. He also pointed to Musk's $1 trillion pay package and his substantial stake in xAI as further catalysts for Tesla's AI ambitions.

Wedbush maintains its 'outperform' rating on Tesla, setting a 12-month price target of $600 (£447.80) per share.

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