We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cathie Wood Trims TSLA Stake Before Robotaxi Day: Should You Too?
Read MoreHide Full Article
Key Takeaways
Cathie Wood's ARKK sold 50K TSLA shares despite robotaxi optimism and a $2,600 price target.
TSLA plans to launch robotaxi service in Austin on June 12 but the hype already seems priced in the stock.
TSLA EV sales continue to slip, with EPS estimates falling and valuation appearing stretched.
Electric vehicle (EV) behemoth Tesla (TSLA - Free Report) is set to roll out its robotaxi services very soon. Per Bloomberg, the launch is just a week away. The buzz around this next-gen mobility service sent Tesla’s stock soaring, with shares up roughly 23% last month despite a weak first-quarter 2025 earnings report. But what’s raising eyebrows now is a surprising move from one of Tesla’s most vocal bulls — Cathie Wood.
Wood’s ARK Innovation ETF, known for its long-term conviction in disruptive tech, sold around 50,000 Tesla shares last week, worth roughly $17 million. Is this a sign that she’s pulling back on her bullish stance? Not really.
Despite trimming the position, Tesla remains ARKK’s top holding, and ARK Innovation is sticking with its ambitious $2,600 price target for the stock by 2029. In fact, it believes a whopping 90% of Tesla’s value by then will come from its robotaxi business. Wood is still very much optimistic about Tesla’s future in the robotaxi business, AI and robotics. She believes robotaxis could revolutionize mobility by eliminating the need for car ownership and offering cheaper rides without drivers, like Uber Technologies (UBER - Free Report) and Lyft (LYFT - Free Report) , but at a fraction of the cost.
So why the sell? It appears to be a classic “sell high, buy low” move. Tesla's recent run-up gave Wood a chance to book some gains, with the idea of buying back in on a dip. ARK has a history of doing exactly that—grabbing stocks when they drop below key technical levels.
So, just like Cathie Wood, are you feeling optimistic about Tesla’s upcoming robotaxi launch? Or do you think the hype is already priced in? Are you considering following her moves or do you feel Tesla has become too risky an investment and it’s better to stay on the sidelines for now? Let’s find out.
There’s no doubt the buzz around Tesla’s upcoming robotaxi launch is real—and growing louder by the day. On Tesla’s April earnings call, CEO Elon Musk said the company expected to begin offering fully autonomous rides in Austin as early as June. Bloomberg later reported a more specific date — June 12. Slowly but surely, a clearer picture of what Tesla’s rollout might actually look like is forming.
Just last week, Tesla tested a Model Y with no one in the driver’s seat on public streets in Austin. Musk confirmed this on X, saying the tests went smoothly and without incident. He also mentioned that Tesla would begin something called “self-delivery,” where Model Y vehicles drive themselves from the factory to customers starting this month.
For the initial rollout, Musk said Tesla will deploy about 10 robotaxi Model Ys in the first week, with the potential to scale to 1,000 over the next few months. However, the service will be geo-fenced, meaning it’ll avoid certain areas deemed unsafe. Musk had earlier said that “unsupervised autonomy” will first be achieved in Austin, but it is quite likely that these robotaxi trips will still be monitored by human supervisors.
As Tesla robotaxi prepares to hit the road, it’s actually playing catch-up, lagging behind Alphabet’s (GOOGL - Free Report) Waymo and other competitors. Alphabet’s Waymo currently dominates the U.S. robotaxi market. Waymo is already running commercial services in four U.S. cities—delivering over 250,000 paid rides per week. In fact, Alphabet has committed to investing $5 billion into Waymo over the coming years. Waymo has also partnered with Uber to expand its reach. In fact, Uber and Lyft are fast losing market share to Waymo. In San Francisco, Waymo has already overtaken Lyft as the second-most popular ride-hailing option after Uber.
Tesla, by contrast, is only now entering the game. The company still needs to officially launch the service, prove its reliability, earn customer trust, and roll out enough properly equipped Model Ys to make it a viable business. And while Tesla may have millions of cars on the road and grand plans for 2 million Cybercabs by 2026, execution remains a big question mark.
Years of missed deadlines and limited testing have put Tesla in a tough spot. While the promise is huge, it has to deliver—fast. In this race, the gap between hype and reality is growing harder to ignore.
TSLA EV Sales Continue to Slide
While all eyes are on Tesla’s robotaxi plans, the company’s core EV business continues to signs of trouble. After recording its first annual sales drop in 2024, Tesla posted its weakest quarterly deliveries in over two years in the first quarter of 2025. The trend isn’t improving. Tesla’s China sales fell 15% year over year in May to 61,662 units, marking the eighth straight month of declines. In Europe, sales also slid for the fifth consecutive month.
Competition is heating up from both legacy automakers and aggressive new EV entrants, and Tesla’s aging lineup isn’t helping. Meanwhile, Elon Musk’s political controversies have dented the brand’s image, especially in international markets. Although Musk has stepped back from a controversial government role, the reputational impact lingers.
What Do Estimates for TSLA Say?
The Zacks Consensus Estimate for Tesla’s 2025 sales and EPS implies a year-over-year decline of roughly 1% and 22%, respectively. The EPS estimates have been southbound over the past 60 days.
Image Source: Zacks Investment Research
Tesla’s Valuation: Too Much Future Priced In?
From a valuation standpoint, Tesla appears richly priced. The stock is trading at a forward price-to-sales ratio of 10.23—well above the industry average of 2.75. Much of this premium seems to reflect early optimism around its robotaxi ambitions, even though the success of that venture is far from certain. The market is pricing in significant breakthroughs in high-risk, unproven areas like autonomous driving and humanoid robotics—bold bets that may take years to materialize, if at all.
Image Source: Zacks Investment Research
Conclusion
Tesla may be hyping up its robotaxi future, but investors should keep their expectations in check. At such a high valuation multiple, Tesla is priced as if robotaxis are already a proven, profitable business. They’re not. And with Waymo widening its lead, Tesla risks becoming an also-ran in a race it once aimed to dominate. Meanwhile, Tesla continues to lose ground in core EV markets.
Yes, the long-term vision is bold, and if executed well, Tesla could still reshape mobility. But until we see real traction on both technology and adoption, this risk-reward simply doesn’t add up right now.
Cathie Wood may remain bullish, but even she is taking profits now. If you’re holding Tesla, consider trimming. For those eyeing an entry, more clarity and a post-robotaxi-hype pullback could offer a better entry point.
For now, Tesla is a risky investment. The stock carries a Zacks Rank #5 (Strong Sell).
Image: Bigstock
Cathie Wood Trims TSLA Stake Before Robotaxi Day: Should You Too?
Key Takeaways
Electric vehicle (EV) behemoth Tesla (TSLA - Free Report) is set to roll out its robotaxi services very soon. Per Bloomberg, the launch is just a week away. The buzz around this next-gen mobility service sent Tesla’s stock soaring, with shares up roughly 23% last month despite a weak first-quarter 2025 earnings report. But what’s raising eyebrows now is a surprising move from one of Tesla’s most vocal bulls — Cathie Wood.
Wood’s ARK Innovation ETF, known for its long-term conviction in disruptive tech, sold around 50,000 Tesla shares last week, worth roughly $17 million. Is this a sign that she’s pulling back on her bullish stance? Not really.
Despite trimming the position, Tesla remains ARKK’s top holding, and ARK Innovation is sticking with its ambitious $2,600 price target for the stock by 2029. In fact, it believes a whopping 90% of Tesla’s value by then will come from its robotaxi business. Wood is still very much optimistic about Tesla’s future in the robotaxi business, AI and robotics. She believes robotaxis could revolutionize mobility by eliminating the need for car ownership and offering cheaper rides without drivers, like Uber Technologies (UBER - Free Report) and Lyft (LYFT - Free Report) , but at a fraction of the cost.
So why the sell? It appears to be a classic “sell high, buy low” move. Tesla's recent run-up gave Wood a chance to book some gains, with the idea of buying back in on a dip. ARK has a history of doing exactly that—grabbing stocks when they drop below key technical levels.
So, just like Cathie Wood, are you feeling optimistic about Tesla’s upcoming robotaxi launch? Or do you think the hype is already priced in? Are you considering following her moves or do you feel Tesla has become too risky an investment and it’s better to stay on the sidelines for now? Let’s find out.
Tesla, Inc. Price and Consensus
Tesla, Inc. price-consensus-chart | Tesla, Inc. Quote
Robotaxi Hype is Real but Tesla Lags This Race
There’s no doubt the buzz around Tesla’s upcoming robotaxi launch is real—and growing louder by the day. On Tesla’s April earnings call, CEO Elon Musk said the company expected to begin offering fully autonomous rides in Austin as early as June. Bloomberg later reported a more specific date — June 12. Slowly but surely, a clearer picture of what Tesla’s rollout might actually look like is forming.
Just last week, Tesla tested a Model Y with no one in the driver’s seat on public streets in Austin. Musk confirmed this on X, saying the tests went smoothly and without incident. He also mentioned that Tesla would begin something called “self-delivery,” where Model Y vehicles drive themselves from the factory to customers starting this month.
For the initial rollout, Musk said Tesla will deploy about 10 robotaxi Model Ys in the first week, with the potential to scale to 1,000 over the next few months. However, the service will be geo-fenced, meaning it’ll avoid certain areas deemed unsafe. Musk had earlier said that “unsupervised autonomy” will first be achieved in Austin, but it is quite likely that these robotaxi trips will still be monitored by human supervisors.
As Tesla robotaxi prepares to hit the road, it’s actually playing catch-up, lagging behind Alphabet’s (GOOGL - Free Report) Waymo and other competitors. Alphabet’s Waymo currently dominates the U.S. robotaxi market. Waymo is already running commercial services in four U.S. cities—delivering over 250,000 paid rides per week. In fact, Alphabet has committed to investing $5 billion into Waymo over the coming years. Waymo has also partnered with Uber to expand its reach. In fact, Uber and Lyft are fast losing market share to Waymo. In San Francisco, Waymo has already overtaken Lyft as the second-most popular ride-hailing option after Uber.
Tesla, by contrast, is only now entering the game. The company still needs to officially launch the service, prove its reliability, earn customer trust, and roll out enough properly equipped Model Ys to make it a viable business. And while Tesla may have millions of cars on the road and grand plans for 2 million Cybercabs by 2026, execution remains a big question mark.
Years of missed deadlines and limited testing have put Tesla in a tough spot. While the promise is huge, it has to deliver—fast. In this race, the gap between hype and reality is growing harder to ignore.
TSLA EV Sales Continue to Slide
While all eyes are on Tesla’s robotaxi plans, the company’s core EV business continues to signs of trouble. After recording its first annual sales drop in 2024, Tesla posted its weakest quarterly deliveries in over two years in the first quarter of 2025. The trend isn’t improving. Tesla’s China sales fell 15% year over year in May to 61,662 units, marking the eighth straight month of declines. In Europe, sales also slid for the fifth consecutive month.
Competition is heating up from both legacy automakers and aggressive new EV entrants, and Tesla’s aging lineup isn’t helping. Meanwhile, Elon Musk’s political controversies have dented the brand’s image, especially in international markets. Although Musk has stepped back from a controversial government role, the reputational impact lingers.
What Do Estimates for TSLA Say?
The Zacks Consensus Estimate for Tesla’s 2025 sales and EPS implies a year-over-year decline of roughly 1% and 22%, respectively. The EPS estimates have been southbound over the past 60 days.
Tesla’s Valuation: Too Much Future Priced In?
From a valuation standpoint, Tesla appears richly priced. The stock is trading at a forward price-to-sales ratio of 10.23—well above the industry average of 2.75. Much of this premium seems to reflect early optimism around its robotaxi ambitions, even though the success of that venture is far from certain. The market is pricing in significant breakthroughs in high-risk, unproven areas like autonomous driving and humanoid robotics—bold bets that may take years to materialize, if at all.
Conclusion
Tesla may be hyping up its robotaxi future, but investors should keep their expectations in check. At such a high valuation multiple, Tesla is priced as if robotaxis are already a proven, profitable business. They’re not. And with Waymo widening its lead, Tesla risks becoming an also-ran in a race it once aimed to dominate. Meanwhile, Tesla continues to lose ground in core EV markets.
Yes, the long-term vision is bold, and if executed well, Tesla could still reshape mobility. But until we see real traction on both technology and adoption, this risk-reward simply doesn’t add up right now.
Cathie Wood may remain bullish, but even she is taking profits now. If you’re holding Tesla, consider trimming. For those eyeing an entry, more clarity and a post-robotaxi-hype pullback could offer a better entry point.
For now, Tesla is a risky investment. The stock carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here