Wall Street Backs Tesla? Cathie Wood Spends Nearly $28 Million Buying Its Stock on the Dip

ARK Invest, led by Cathie Wood, continued its consistent "buy the dip" strategy. On April 8, ARK purchased 33,210 shares of Tesla via its ARKQ ETF, valued at approximately $11.4 million. Over the previous two trading days, ARK had cumulatively bought about $16.4 million. So far this week, ARK's total purchases in Tesla have reached approximately $27.8 million.

As of now, Tesla remains the largest holding in the ARK Innovation ETF (ARKK), accounting for approximately 8.49%. This position size reflects Cathie Wood's long-term commitment to holding Tesla and her optimistic outlook on the company's future prospects.

In early 2026, ARK updated its open-source Tesla valuation model, raising its 2026 price target for Tesla to $4,600 per share, a significant increase from its previous 2025 target of $3,000. The model incorporates 38 independent data inputs with a single core logic: Tesla is no longer just an automobile company, but an autonomous taxi platform. According to model projections, the robotaxi business will contribute approximately 60% of Tesla's expected value and more than half of its EBITDA by 2026.

Cathie Wood herself has stated that if Tesla successfully transitions into a high-margin technology platform driven by software and autonomous driving services, its gross margins will reach 70% to 80%, which is unimaginable for traditional automakers.

While traditional automakers sell cars, where the primary revenue is often determined by sales volume, if Tesla's Robotaxi network is deployed, the utilization of each vehicle will increase from less than one hour per day to several hours. The revenue model will shift from "selling hardware" to "selling mileage," creating exponential economies of scale. Cathie Wood is betting on the massive transformation this business model will bring to Tesla over the next five years.

Simultaneously, Cathie Wood adjusted other holdings.

ARKQ sold 33,812 shares of Teradyne (TER), netting approximately $12.1 million—Teradyne had previously surged nearly 12% after Goldman Sachs named it a top semiconductor pick; Cathie Wood took profits at the peak to reallocate capital to Tesla. This "sell semiconductors, buy Tesla" maneuver also reflects ARK's repricing of Tesla's AI attributes: Tesla is evolving from an automotive stock into an AI stock.

Cathie Wood's optimistic assessment stands in sharp contrast to the current reality of Tesla's fundamentals.

In the first quarter of 2026, Tesla's global deliveries totaled 358,023 units, up 6.3% year-over-year but below analyst expectations of approximately 370,000, marking its worst performance in a year. Production for the quarter reached 408,386 units, and the massive gap of 50,363 units between production and deliveries is the largest single-quarter discrepancy in Tesla's history, signaling a clear inventory warning.

This marks the second consecutive year of declining annual deliveries for Tesla—from 1.79 million units in 2024 to 1.64 million in 2025—a trend unprecedented in its history. Analysts have lowered delivery forecasts for 2026, with some institutions warning of a potential third consecutive year of decline.

The competitive landscape is also deteriorating. BYD has overtaken Tesla to become the world's largest electric vehicle manufacturer. Furthermore, the expiration of the $7,500 U.S. federal EV tax credit in 2025 directly weakened demand support in Tesla's profitable markets.

Amid mounting pressures, JPMorgan analyst Ryan Brinkman reaffirmed his "Underweight" rating on Tesla this week, maintaining a price target of $145—implying approximately 60% downside from current levels. He lowered his first-quarter earnings per share (EPS) estimate from $0.43 to $0.30 and revised his full-year 2026 EPS forecast from $2.00 to $1.80.

Brinkman stated that the market is realizing Tesla may never grow into a giant that dominates the entire automotive industry. Despite its first-mover advantage and expansion strategy, it has failed to launch a new high-volume model in years, causing its market share to stagnate or even shrink while its technological lead appears to be narrowing. Brand recognition continues to slide in Europe, while its presence in the Chinese market is being increasingly squeezed by BYD.

JPMorgan sees an automaker with steadily deteriorating fundamentals, while Cathie Wood envisions a technology company on the verge of a qualitative transformation "from vehicles to robotics"; however, placing bets without clear evidence of progress may force investors to endure heightened risk.

Currently, Tesla's stock price shows no signs of stabilizing. Coupled with persistently weak fundamentals, the share price will likely remain under pressure in the short term unless breakthrough progress in other areas can bolster investor confidence.

This content was translated using AI and reviewed for clarity. It is for informational purposes only.