Cathie Wood trims $11.2 million in longtime favorite stock

Core Viewpoint - Tesla's stock has surged nearly 50% over the past six months, driven by optimism surrounding autonomous driving, AI, and long-term growth prospects, despite sluggishness in the underlying business [1] Group 1: ARK Invest's Actions - Cathie Wood's ARK Invest trimmed its Tesla position by selling approximately $11.2 million worth of shares on December 18 [2][7] - The decision to sell is seen as a disciplined approach to portfolio management rather than a sign of loss of conviction in Tesla [4][8] - ARK's recent trades indicate a pattern of position sizing and profit-taking following a significant rally, with Tesla remaining ARK's largest holding [8] Group 2: Market Sentiment and Valuation - Wall Street's view on Tesla is divided, with optimism about AI countered by concerns over margins and execution, as well as how much good news is already priced in [6][12] - Analysts suggest that Tesla's upside potential may already be reflected in its current valuation, leading to increased valuation sensitivity among investors [12]