Tesla's Driverless Taxi Platform A Catalyst for Stock Price Surge
TapTechNews July 17th news, Cathie Wood, the helm of the well-known investment firm Ark Investment Management, said recently that Tesla is building a driverless taxi platform, which will be a catalyst for its stock price to rise by about ten times.
Wood described the driverless taxi ecosystem as a huge opportunity with a global market value of 8 to 10 trillion US dollars, and believes that platform providers including Tesla are expected to occupy half of the market share. She pointed out that investors are gradually getting rid of the concept of simply regarding Tesla as an electric vehicle manufacturer and beginning to recognize the potential value of its driverless taxi business.
The driverless taxi platform is the largest AI project at present, Wood emphasized, and said that Ark Investment has always based its valuation of Tesla mainly on the potential of its self-driving technology, if our prediction is correct, there is still huge room for Tesla's stock price to rise.
Since the beginning of 2017, Wood and Ark Investment have been advocating the potential of Tesla's driverless taxi network, even months before Tesla CEO Elon Musk publicly announced this plan. However, although Musk described this vision eight years ago, Tesla has not yet launched a vehicle that can navigate on its own without continuous human supervision.
The optimistic expectations for Tesla's driverless taxi plan once boosted its stock price, enabling it to erase the 43% decline since the beginning of the year before April 22. Although the stock returned to the positive growth range at the beginning of this month, its performance in the past year still lags far behind compared to that of the Big Seven.
TapTechNews noted that Wood has long been optimistic about Tesla and has made it the top heavyweight stock of its flagship fund Ark Innovation ETF. The fund has fallen nearly 9% this year and its assets have shrunk by about a third, partly due to redemption pressure. In contrast, the S&P 500 index has risen by 18%. Wood is known for making bold predictions, including predicting that Bitcoin will reach $1.48 million by 2030.
Wood said that the driverless taxi network will be a winner-takes-all market, and the provider that can transport passengers from point A to point B the safest and fastest will win the majority of the business. Platform providers can obtain a 30% to 50% revenue share from the fleet operators on their platforms, thereby generating repetitive income with explosive cash flow and a profit margin of more than 50%, which is completely different from the traditional one-time car sales model.
We think people have ignored the scale, development speed and profitability of this opportunity, she said, and expects Tesla to lead the US market.
Bloomberg News reported last week that Tesla postponed the planned driverless taxi launch by about two months to October to give the team more time to build additional prototypes. The news led to a 8.4% drop in Tesla's stock price, the largest single-day decline since January. Wood didn't care. We may be closer to the driverless taxi opportunity rather than farther away, she said. Musk wants to show us something more amazing than what might be seen on August 8, and he believes he can do it before October.
Wood also believes that driverless trucks will beat the railroads in price and provide point-to-point services, and the railroad system favored by long-term investor Warren Buffett may become a trapped asset.