Cathie Wood Believes This Fast-Paced Artificial Intelligence (AI) Stock Can Skyrocket 1,138%, but Congress’ Most … – Yahoo Finance

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Nikola Tesla was born during a lightning storm. He later earned the nickname “the wizard of lightning” because of his electrical inventions. It probably shouldn’t be surprising that the company named after him, Tesla (NASDAQ: TSLA), is the investing equivalent of a lightning rod, attracting diehard supporters and adamant opponents.

Tesla’s fans and foes span a wide spectrum. Ark Invest founder Cathie Wood believes this fast-paced artificial intelligence (AI) stock can skyrocket by 1,138%. However, Congress’s most active stock trader is selling shares.

Wood’s favorite AI stock

Wood likes several AI stocks. There’s no doubt whatsoever, though, that Tesla is her favorite. The electric vehicle (EV) maker ranks as the top holding in Wood’s flagship Ark Innovation ETF and the Ark Autonomous Technology & Robotics ETF,

Nearly one year ago, Ark Invest set a price target of $2,000 for Tesla by 2027. Wood’s team projected explosive growth in EV sales. More importantly, they predicted that autonomous ride-hailing would become an even bigger market opportunity for the company.

Although Tesla’s share price soared nearly 80% in the months after Ark Invest’s bullish update, those gains have evaporated. Tesla is now trading nearly exactly where it did at this point last year.

Wood remains a cheerleader for the company, though. Ark Invest has bought more shares of Tesla. In a recent interview with CNBC, she stood behind the $2,000 target, saying, “Now is not the time to run for the hills.”

One congressman is voting with his pocketbook against Tesla

Speaking of hills, a notable investor on Capitol Hill isn’t so enthusiastic about Tesla. Rep. Rho Khanna (D-Calif.) is by far the most active trader in the U.S. Congress. In 2023, he made a whopping 4,253 trades — more than 2.3 times greater than the runner-up, Rep. Michael McCaul (R-Texas).

Khanna bought Tesla shares throughout much of 2023. However, he began selling the stock in November of last year and continued to do so in January and February of 2024.

Members of Congress don’t have to explain the reasoning behind their stock trades. Khanna’s December 2023 interview with The New York Times, though, could shed some light on his motivation for selling Tesla.

Khanna stated in the interview that Tesla CEO Elon Musk “is unparalleled in genius.” He said, “If you spend 15 minutes talking to him, you’ll realize his brilliance.” However, the congressman added, “Then you see his tweet that’s like a seventh grader. It’s a lot that you can’t defend.”

Who’s right about Tesla: Wood or Khanna?

Is Tesla stock a no-brainer buy as Wood seems to think? Or should investors sell the stock as Rep. Khanna has done this year? The answer depends on which assumptions you believe.

Many Tesla bears assume Musk’s antics will hurt Tesla. They also likely think the market for electric vehicles won’t grow as much as expected. Most Tesla bears also probably don’t look for robotaxis to take off nearly as much as Ark Invest predicts.

On the other hand, Tesla bulls think the exact opposite. They’d argue Musk has led the company to tremendous success so far. They believe EVs are the future of the automotive industry. They expect the robotaxi market to grow tremendously (even if they’re not on board with the aggressive forecast made by Ark Invest.)

As for me, I’m on the fence about Tesla. I think the bulls could be right, but I wouldn’t be surprised if the bears are. There’s one thing I am sure about concerning Tesla, though: It will continue to be a lightning rod.

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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

Cathie Wood Believes This Fast-Paced Artificial Intelligence (AI) Stock Can Skyrocket 1,138%, but Congress’ Most Active Stock Trader Is Selling Shares was originally published by The Motley Fool

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