Ahead of Tesla results, Cathie Wood says Wall Street’s valuing it all wrong – #stocks chatter


Ahead of Tesla results, Cathie Wood says Wall Street's valuing it all wrong
[Ahead of Tesla results, Cathie Wood says Wall Street's valuing it all wrong | Morningstar](https://www.morningstar.com/news/marketwatch/2021072670/ahead-of-tesla-results-cathie-wood-says-wall-streets-valuing-it-all-wrong)

**Provided by** **Dow Jones**Jul 26, 2021 6:15 AM CDT

By Barbara Kollmeyer

Our call of the day comes from Cathie Wood, founder of ARK Invest, whose flagship ARK Innovation exchange-traded fund (ARKK) has seen a bumpy July thanks to market volatility. But Wood, who has not been without her critics ([link](https://www.marketwatch.com/articles/ark-innovation-etf-dot-com-bubble-51626731607)), doubled down on her fund's forte -- disruptive technologies and innovative business models and their importance in a portfolio.

In the first of a series of interviews that published Monday on Real Vision, Wood zeroed in on shortcomings of Wall Street, which she said needs more specified technology analysis. She highlighted its approach to Tesla as one example.

Wood's base case calls for shares of the EV giant to hit $3,000, which is viewed as "crazy," given shares are closer to $700, she noted.

"We believe the reason there is such a big inefficiency in Tesla's valuation is the short-term time horizon of analysts and the wrong analysts following it," said Wood, who explained that Tesla is a multifaceted technology company, but being covered by Wall Street auto analysts.

"Tesla is a technology company, but it's not just one technology company," she said, pointing to energy storage, robotics, artificial intelligence and software-as-a-service. "So we have three analysts building the Tesla model," she said.

How big is her overall disruptive and innovative vision overall? She said market capitalization in public equity markets focused on transformative innovation was about $7 trillion in 2019, then doubled in 2020 to $14 trillion.

"And we believe that number is going to $75 trillion plus during the next five to 10 years and probably will account...for more than all of the appreciation in the equity markets because..the other side of disruptive innovation is creative destruction, so the traditional benchmarks today are being increasingly populated by value traps cheap for a reason because they are going to be disrupted or destroyed," said Wood.

It will be "critically important to get innovation right and I do not believe traditional research departments are set up to do that right now," said the money manager. You can check out part one of her interview here ([link](https://www.realvision.com/shows/the-kiril-sokoloff-interviews/videos/cathie-wood-creative-disruption-and-the-sectors-it-will-devastate)).


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