Cathie Wood’s Ark splurged on US$32 million in Tesla shares during US$70 billion stock plunge

Investing

Cathie Wood’s Ark Invest bought Tesla stock on Monday as shares of the electric vehicle maker helmed by Elon Musk tumbled to their lowest level in 11 weeks—doubling down on a lofty investment as analysts remain bullish the firm can withstand weakening economic conditions as it gears up for third-quarter earnings.
The Tesla brand logo embellishes the nose of a Tesla electric sedan in Vail, Colorado. (Photo by Robert Alexander/Getty Images)

A flurry of other analysts have remained bullish but cautious on Tesla after its weekend report: Morgan Stanley’s Adam Jones on Tuesday said shares should “give back recent relative strength” as “it would be unreasonable to assume” the company isn’t facing headwinds from the global economic slowdown, but he reiterated a price target of $383—suggesting more than 50% upside. Tesla reports third-quarter earnings after the market closes on October 19.

Wood’s fund, which Ark says focuses on “disruptive innovation,” has struggled this year as tech stocks plunged from pandemic-era highs. Top holdings Zoom and Roku have cratered 60% and 74%, respectively. “We are in a recession,” Wood told CNBC this summer of worse-than-expected tech earnings, positing that her fund should once again outperform the market once the economic pain subsides.

This article was first published on forbes.com

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