Why Cathie Wood’s team expects Tesla stock to rise more than 1,000%

Ark Invest, the investment firm founded by Cathie Wood, has set a new base-case target price for Tesla of $4,400 per share by 2031, as laid out in a research note published Monday. That implies almost 1,100% upside from current levels. Ark’s bull case calls for an even steeper rally to $5,000 per share, while what it describes as its bear case puts the stock at just $3,300 per share. What underpins such an optimistic forecast?

Ark identifies robotaxis as the main driver. Its analysts estimate that the business will account for around 80% of Tesla’s enterprise value in five years. By then, Tesla will have deployed between 8 million robotaxis in the base case and 10 million in the bull case.

Robotaxis could significantly expand the passenger transportation market, Ark argues, while low operating costs would allow them to remain profitable even at lower fares. By adjusting prices dynamically based on demand and traffic congestion, a robotaxi network could maximize revenue at peak times and make transportation more accessible when demand is low, the note states.

Ark’s previous forecast, published in 2024, projected that robotaxis would account for around 90% of Tesla’s enterprise value within five years. Its analysts attribute the change to their view that the Robot-as-a-Service business will gain momentum as robotaxis proliferate.

Ark also sees a possible merger between Tesla and SpaceX within the next five years. Tesla’s profitable robotaxi business could finance SpaceX’s ambitious plans for orbital data centers, while SpaceX’s compute-intensive AI models could underpin deployments of Optimus humanoid robots. Collaboration on Terafab, a project to build their own semiconductor manufacturing capacity, could ease chip supply constraints for both companies, in Ark’s view. In the event of a merger, Ark believes Tesla and SpaceX could generate combined revenue of $3.8 trillion and EBIT of $2.7 trillion by 2031, with SpaceX accounting for around 62% of revenue and 69% of profit.

The unveiling of the redesigned Roadster electric sports car last week also prompted the new forecast. The event took place at a SpaceX facility in Texas, nine years after Elon Musk first introduced the concept. In the demonstration, the car, equipped with cold-gas thrusters borrowed from SpaceX and a suction system, drove upside down along a curved ramp, jumped and flipped in the air before landing, and leaped over several parked vehicles. Tesla plans to begin production in 2028.

Ark Invest is one of Tesla’s largest institutional shareholders: it held 2.8 million shares as of the end of the second quarter. Wood has been one of Tesla’s most prominent bulls for years. Tesla is scheduled to report third-quarter results after the market closes on Wednesday.

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