Elon Musk stands as the preeminent investor of the modern age, according to Ark Invest CEO Cathie Wood, who remains confident in his ability to drive transformative technological advancements. Despite short-term volatility in Tesla’s stock and recent market sell-offs, Wood maintains her bullish outlook on Musk’s enterprises, particularly in artificial intelligence and autonomous transportation.
Wood’s flagship investment vehicle, the Ark Innovation ETF (ARKK), has faced significant challenges in recent years. While the S&P 500 has nearly doubled in value over the past five years, ARKK has posted a mere 2% return. In 2024, ARKK delivered a 12% gain, falling short of the broader market’s 24% increase. Year-to-date, the fund has declined by more than 6.5%, with much of the downturn attributable to Tesla, its largest holding at 11% of the portfolio. Tesla’s stock has dropped 28% since the beginning of 2025.
However, Wood remains unwavering in her support for Musk and his ventures. Speaking at Bloomberg’s “Odd Lots” podcast, she reiterated her belief that Musk is the key innovator of our time. Through ARK Venture Fund, investors gain exposure to Musk’s privately held businesses, including SpaceX, the social media platform X, and AI startup xAI. She dismisses concerns that Musk’s expanding commitments—including his advisory role in the Trump Administration’s Department of Government Efficiency—will detract from his leadership at Tesla.
“He has surrounded himself with business experts and engineers tackling the world’s most complex problems,” Wood stated, emphasizing Musk’s ability to remain focused on advancing transformative technologies.
Economic and Policy Implications
Wood further suggests that a second Trump administration could catalyze economic growth through tax reductions and deregulation, akin to the 1980s “Reagan Revolution.” She anticipates a resurgence in active fund management, highlighting parallels to the PC revolution that emerged during that period.
“It was the golden age of active management,” she remarked, predicting that this trend will return at an even greater scale in the coming years.
AI Investment and Market Outlook
The global AI investment landscape remains a focal point of economic discourse. With major tech firms—including Meta, Amazon, Alphabet, and Microsoft—projected to allocate up to $320 billion towards AI and data infrastructure in 2025, the sector’s economic potential is substantial. Wood is particularly optimistic about AI’s role in healthcare, with CRISPR Technologies comprising 5% of ARKK’s holdings, ranking as the ETF’s sixth-largest position.
However, she identifies autonomous vehicles as the most significant AI-driven opportunity. Wood projects the robotaxi market to be an $8-$10 trillion industry by 2029, underpinning ARK’s $2,600 price target for Tesla stock, which would elevate its market capitalization beyond $9 trillion—surpassing Apple’s current valuation of $3.5 trillion.
Tesla’s current GAAP gross margin of 16% is expected to increase substantially with the widespread adoption of autonomous vehicle technology, potentially reaching the 70-90% margins typical of leading software firms. Wood argues that Tesla should not be viewed solely as an EV manufacturer but as a leader in AI-driven mobility solutions.
“It’s a winner-take-most market,” Wood concluded, asserting Tesla’s dominant position in the U.S. autonomous vehicle sector. As AI continues to shape the global economy, she believes Musk’s leadership will remain instrumental in defining the next wave of technological and economic transformation.