Barely two weeks after doubling down on Tesla (NASDAQ:TSLA) shares — purchasing TSLA stock on two separate occasions during the week of Dec. 21 — Ark Invest founder Cathie Wood is proving yet again that she isn’t done. TSLA stock still seems to be in a race to the bottom, but Wood is sticking to her modus operandi.
Per Bloomberg, Wood recently doubled down on the beaten down electric vehicle (EV) producer, adding more than 176,000 shares. As noted, she made multiple purchases throughout the second half of 2022. Just before the end of the year, she also stated that TSLA still has “miles to run.” That interview took place before Tesla reported disappointing fourth-quarter deliveries, but Wood’s recent purchases make it clear she stands by the assessment.
Here’s what investors should know moving forward.
What’s Happening With TSLA Stock?
After falling yesterday, TSLA stock is back in the green by 4% as of this writing. This likely isn’t because of Wood’s purchases. However, it does warrant a closer look as investors ponder the future of the company.
Shares of Tesla have been in decline ever since CEO Elon Musk turned his attention from Tesla to Twitter. After Q4 deliveries fell short of Wall Street expectations, it’s also harder for many investors to remain optimistic. Analysts like Itay Michaeli of Citi have issued bearish takes as a result.
This appears to have only enticed Wood to keep buying, however. Anyone who follows her exchange-traded funds (ETFs) knows Wood likes to go long on beaten down tech stocks as they plunge. Some of her other top holdings include Zoom (NASDAQ:ZM) and Exact Sciences (NASDAQ:EXAS), both of which are recovering from a turbulent 2022. Buying on the dip remains the core principle of her investing philosophy — and Tesla has been on a major dip for months. Cathie Wood’s recent buy, worth roughly $19 million, came as shares fell by 12%. Seeking Alpha reports:
“Wood added a total of 176,112 shares of Tesla to Ark Invest, with her flagship fund ARK Innovation ETF […] taking on the lion’s share of 144,776 shares. An additional 31,336 shares were added to Wood’s ARK Autonomous Technology & Robotics ETF.”
Seeking Alpha also notes that both ETFs suffered significant losses throughout 2022, with the ARK Innovation ETF (NYSEARCA:ARKK) and ARK Autonomous & Robotics ETF (BATS:ARKQ) falling 67.5% and 47.5%, respectively. However, both of these funds are back in the green today alongside TSLA stock. This can be attributed to positive momentum as markets shake off yesterday’s volatility.
Still, although Wood’s faith in Tesla may be interpreted as a positive sign, that doesn’t change the fact that high interest rates are casting a shadow over growth stocks. For plenty of experts, skepticism and increasingly bearish outlooks are abound.
The Road Ahead
Until Elon Musk turns his attention back to Tesla and shows investors that he’s focused on helping the EV company grow, it will be hard for anyone except contrarian investors to stand behind TSLA stock. Even as Wood continues buying TSLA stock, there’s no question that uncertainty is rising. The New York Times reports that, following the recent large-scale selloff, Tesla investors are bracing for a difficult year ahead. The company has shed “more than $850 billion in market value since its peak in November 2020.” That should worry even contrarian investors.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
