Tesla Inc. (NASDAQ: TSLA), in 2025, will face a number of challenges, including increased competition, tariffs and brand crises.
Cathie wood, an influential investor, is still super-bullish about the electric vehicle stock, which she thinks will reach $2,600 by the end of the decade.
Her recent purchase wasn’t TSLA. Ark Invest’s founder and CEO, instead of investing $9.0m in TSLA stock on April 4, parked the money into another Magnificent Seven.
Enter Amazon.com Inc. (NASDAQ:AMZN).
Cathie Wood, how much has she invested in Amazon?
Wood bought more than 54,000 Amazon shares for $9.3m on 4 April, a sign that she saw a drop of 30% in AMZN’s stock as an opportunity to purchase a high-quality name at a discount.
Amazon, a Seattle-based giant that has invested aggressively in AI to increase its presence, remains a positive investment for the renowned investor.
Alexa+ is the latest product launched by Amazon, besides its ongoing engagement with Anthropic.
Alexa+, the upgraded version of Amazon’s AI assistant, is capable of controlling smart devices in your home, ordering online food, and a host of other things.
Amazon’s revenue will be diversified by investing in AI, beyond cloud and retail.
AMZN has a very attractive price.
Wood is confident that Amazon can use its scale globally and diversify revenue streams to help navigate the emerging trade war in response to Trump’s new tariffs.
The valuation of the stock in the technology sector is too good to be ignored.
AMZN’s current price is only 30 times the estimated earnings for next year, which is significantly below its historic average of 55.
Wall Street appears to be in agreement with Cathie Wood about Amazon.
AMZN’s consensus rating is currently “buy”, with a mean price target of $267. This indicates a potential gain of more than 50%.
Woods’ view of TSLA is not my opinion.
Cathie Wood’s investment in Amazon stocks may have proven to be a wise one, or at the very least, practical, but for now, her prediction that TSLA will reach $2,600 per share within five years seems more of a pipe dream.
Tesla’s delivery problems are a result of the increasing competition with its Chinese competitors.
The EV manufacturer has also been slow to launch new products.
The multinational, based in Austin, Texas saw its net profit plummet by 52%. This trend is expected to continue this year.
Tesla is a company with low growth, and its price to earnings multiple was about 117 as of this writing.
Wood’s prediction of a $10 trillion valuation for TSLA is not accurate. The EV stock may even fall further.
Cathie Wood’s post Cathie says Tesla will reach $2,600 but she invests in Magnificent 7, a stock that is worth $9M, may change as new information becomes available
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