Cathie Wood Just Had a Comeback Year. This Controversial Stock Is Still Her Top Holding.

Core Insights - Cathie Wood's ARK funds significantly outperformed the broader market in 2025, with ARKK and ARKW each rising approximately 35%, compared to the S&P 500's gain of over 16% [1] - Tesla's stock remains a central focus for Wood, despite recent reductions in her holdings, which raises questions about her confidence in the company [3][5] - Tesla's fourth-quarter vehicle deliveries fell by 16% year-over-year, totaling 418,227 units, which was below analysts' expectations [6] - Tesla's energy business showed a 49% growth, deploying a record 14.2 GWh of energy storage products, providing stability amid challenges in the EV sector [7] Company Overview - Tesla, led by Elon Musk, is a key player in the transition to sustainable energy, focusing on electric vehicles, solar energy systems, and energy storage products, with a market cap of $1.44 trillion [2] - The company is increasingly investing in AI, robotics, and automation, which aligns with its long-term growth strategy [2] Investment Strategy - Wood's ARK funds have seen a resurgence in 2025, driven by themes of disruptive technology, including AI and robotics, which are central to ARK's investment philosophy [3] - Tesla is the largest holding in ARKK and ARKW, representing 11.11% and 8.97% of their portfolios, respectively, with a price target of $2,600 set for 2029 [4] Financial Performance - Tesla's projected earnings per share for Q4 are $0.44, down 39.66% year-over-year, with revenue expected to decline by 4.26% to $24.61 billion [8] - Despite the anticipated weak quarterly results, investor focus remains on Tesla's advancements in AI and robotaxis, which are seen as critical for future growth [8] Future Outlook - The success of Tesla's robotaxi program is crucial for its stock valuation, which is currently trading at approximately 276 times forward earnings, indicating high expectations for its autonomy technology [9] - Tesla has begun rolling out its robotaxi business in select locations, with plans for expansion, while maintaining a focus on regulatory compliance and operational reliability [10][11] Analyst Sentiment - Analysts are divided on TSLA stock, with a consensus "Hold" rating among 40 analysts, reflecting a mix of bullish and bearish perspectives [12]