1. Tesla Inc (NASDAQ:TSLA)
ARK’s Stake Value: $1,310.7 Million
Cathie Wood has long been a believer in Tesla Inc (NASDAQ:TSLA) and remains bullish on the company for the long term despite the EV maker facing demand challenges and tough competition. Wood has a $2,600 price target for Tesla Inc (NASDAQ:TSLA) for 2029. In a recent YouTube interview with “The Rundown,” Wood said most of Tesla’s upside potential comes from robotaxis. She mentioned Elon Musk’s recent claim that Tesla Inc (NASDAQ:TSLA)’s robo-taxis will be able to operate in 25% to 50% of major US cities by the end of the year, scaling faster than Waymo.
Most of Tesla Inc (NASDAQ:TSLA)’s bull cases are linked to the company’s future plans for autonomous driving and robotics. But its EV business is facing tough competition and demand headwinds. In 2025, Tesla Inc (NASDAQ:TSLA)’s EV deliveries fell for the second straight year, and the company has lost its crown as the world’s top EV maker by annual deliveries to China’s BYD. The stock is down 11% so far this year.
Baron Partners Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its fourth quarter 2025 investor letter:
“In 2025, we exited 30.5% of our position in Tesla, Inc. (NASDAQ:TSLA). We are extremely confident in the company’s prospects and ability to become a significantly more valuable business. The Fund completed its purchase of Tesla shares in 2016 with an ending portfolio weight of 9.6% of total investments. Its average cost of all purchases in the Fund was only $14.22 per share. Due to significant appreciation in the stock, the position increased to 26.7% of the portfolio’s total investments at the end of 2025. Despite offsetting some of the volatility caused by the position’s weight with more stable and uncorrelated investments, Tesla’s stock movements caused increased variability in the entire portfolio. We entered into agreements with a large investment bank to dispose of a portion of the holdings through a redemption in-kind because, we believe, it would have minimal impact on the share price and low transaction costs. Tesla remains a top holding of the Fund. The disposition was a portfolio construction decision and not reflective of reduced confidence in the business.”
While we acknowledge the potential of TSLA to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than TSLA and that has 100x upside potential, check out our report about the cheapest AI stock.
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