Cathie Wood is purchasing Tesla's shares during the post-earnings slump. Should you follow suit?
Tesla Remains a Bullish Pick Amidst Mixed Performance
Cathie Wood and Morgan Stanley have maintained a bullish stance on Tesla's long-term potential, viewing the company as more than just an electric vehicle (EV) manufacturer. They see Tesla as a future leader in autonomous mobility, artificial intelligence (AI), and robotics.
Despite Tesla's recent mixed stock performance and modest Q2 2025 earnings, the company's ongoing innovation in autonomous driving and AI remains a key driver of confidence. Cathie Wood, in particular, expects Tesla’s Robotaxi initiative and advances in AI-driven autonomous technology to transform the company’s business fundamentally, driving significant growth beyond traditional car sales.
Morgan Stanley and other optimistic analysts focus on Tesla’s strong financial position, steady growth in automotive revenue, and growth in deliveries. The bullish outlook relies on Tesla leveraging its AI and autonomous technology to create new revenue streams and scale profits long-term.
However, this positive view contrasts with some bearish analysts concerned about valuation, slowing delivery volumes, and potential impacts from changing government policies.
Cathie Wood, founder and CEO of Ark Invest, purchased 143,190 shares of Tesla across three of her flagship, actively managed exchange-traded funds (ETFs). This purchase, despite Tesla's disappointing Q2 earnings, indicates a major vote of confidence in the company's long-term potential. Cathie Wood maintains her long-term price target on Tesla stock at $2,600.
Morgan Stanley's senior analyst Adam Jonas agrees with Cathie Wood's positive view of Tesla shares. Jonas shares her belief that Tesla is transitioning to a leader in AI, robotics, and autonomy. He also believes that Tesla is investing heavily in new technologies like autonomous vehicles and humanoid robots.
It's important to note that the information and data in this article are solely for informational purposes. For more information, readers are advised to view the website's Disclosure Policy. The author, Wajeeh Khan, did not have positions in any of the securities mentioned in the article.
In summary, Cathie Wood and Morgan Stanley's bullish stance is grounded in Tesla’s potential as a leader in autonomous and AI-driven mobility platforms, like Robotaxi, which they believe outweighs near-term challenges reflected in recent earnings and stock performance. Cathie Wood's purchase of Tesla shares and her long-term price target reassure investors that Tesla's current dip will likely prove temporary only.
Investing in Tesla's shares remains a promising venture, given Cathie Wood's and Morgan Stanley's belief in the company's business expansion beyond traditional car sales, thanks to its advancements in AI and autonomous technology, such as the Robotaxi initiative. Moreover, these analysts emphasize Tesla's potential to create new revenue streams by leveraging AI and autonomous tech to scale profits long-term.
