We recently published a list of Ark Invest Stock Portfolio: Top 10 Stocks to Buy. In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against other top stocks to buy from Ark Invest’s portfolio.
ARK Investment Management LLC, commonly known as ARK Invest, is an American investment management firm headquartered in St. Petersburg, Florida. Founded by Cathie Wood in 2014, the firm specializes in actively managed exchange-traded funds (ETFs) focused on disruptive innovation. As of Q4 2024, ARK holds over $12 billion in 13F securities, with its top ten positions comprising slightly over 50% of its diversified portfolio, which typically comprises between 35 and 55 holdings. The firm’s investment approach spans various market capitalizations, sectors, and geographies, aiming to identify and invest in companies poised to lead in transformative technological advancements.
Cathie Wood, born Catherine Duddy Wood in 1955, is widely recognized as one of the most influential figures in the investment industry. As the founder, CEO, and chief investment officer of ARK Investment Management, she has carved out a reputation for her innovative and forward-thinking investment strategies. Wood’s approach to investing has consistently focused on identifying and capitalizing on disruptive innovation, setting her apart as a visionary in the financial sector.
After graduating from the Notre Dame Academy Catholic girls’ school, Wood pursued higher education at the University of Southern California (USC), where she earned a summa cum laude degree in finance and economics in 1981. She later completed a Master of Business Administration in finance at USC’s Marshall School of Business. A key influence in her academic journey was economist Arthur Laffer, known for the Laffer Curve, which theorizes the relationship between tax rates and tax revenue. Laffer’s mentorship helped shape Wood’s understanding of economic theory and her investment philosophy.
Wood’s career in finance took off after graduation, with roles at prestigious firms such as Jennison Associates, where she spent 18 years in various leadership roles, and Capital Group, as an assistant economist. At AllianceBernstein, where she managed over $5 billion, she honed her ability to identify long-term growth trends. Despite criticism of her investment decisions during the 2008 financial crisis, Wood remained steadfast in her belief that disruptive innovation would drive the future of economic growth. She later went on to co-found Tupelo Capital Management, a hedge fund focused on global thematic strategies.
In 2014, Cathie Wood founded ARK Invest with the goal of focusing exclusively on disruptive innovation and seizing the investment opportunities it generates. Her pioneering move involved structuring actively managed investment strategies as exchange-traded funds (ETFs), an industry-first approach that allowed a broader range of investors to participate in emerging technologies. She recognized that investing in such transformative technologies requires active management to navigate rapid changes, an open research ecosystem unrestricted by sectors, geographies, or market capitalizations to capture technological convergence, and the sharing of knowledge to deepen understanding of emerging industries. Reflecting these principles, ARK stands for Active Research Knowledge—a philosophy that underpins the firm’s investment approach.
Accordingly, ARK’s investment philosophy is centered around thematic investing in disruptive innovation, leveraging over 40 years of experience in identifying high-growth opportunities. ARK defines disruptive innovation as the introduction of technologically enabled products or services that significantly alter existing industries. The firm’s research process focuses on cross-sector innovations such as artificial intelligence, autonomous vehicles, Fintech, robotics, energy storage, DNA sequencing, 3D printing, and blockchain technology. ARK’s goal is to seek long-term capital appreciation by investing in these cutting-edge industries, believing that companies driving technological advancements will fundamentally reshape industries and offer outsized returns compared to traditional investment strategies.
Our Methodology
The stocks discussed below were picked from Ark Invest’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1,009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders as of Q4: 126
Ark Invest’s Equity Stake: $1.33 Billion
Tesla, Inc. (NASDAQ:TSLA)’s Q4 2024 earnings report presented mixed results, with net sales rising 2.15% year-over-year to $25.71 billion, while operating profit dropped 23.3% to $1.58 billion. Earnings per share came in at $0.73, missing analyst expectations by 4.8%. Despite a stock rally driven by speculation over potential policy benefits under President Trump’s administration, Tesla faced substantial challenges, including its first annual decline in vehicle deliveries, which totaled 1.8 million units. To counter slowing demand, the company introduced aggressive price cuts, particularly in North America and China.
While Elon Musk remains committed to advancing autonomy and robotics, Tesla, Inc. (NASDAQ:TSLA) continues to lag behind competitors like Waymo, WeRide, and Pony.ai in the robotaxi market. Musk has announced plans to launch “unsupervised” Full Self-Driving (FSD) in Austin by June and hinted at potential licensing deals, but concerns remain over the technology’s readiness. However, the company’s energy division was a strong performer, generating $3.06 billion in revenue, marking an impressive 113% increase from the previous year.
On March 10, 2025, Tesla, Inc. (NASDAQ:TSLA) shares plummeted by over 15% to $222, marking their lowest closing price since October 23 and their worst percentage loss since 2020. Tesla stock has fallen 53% from its December peak and 12% since Election Day, with its market capitalization shrinking by nearly $800 billion. This drop contributed to a broader market decline, with the tech-heavy Nasdaq Composite slipping 4% amid concerns over Trump’s economic policies. Despite Elon Musk’s $288 million donation to Trump and GOP election efforts, Tesla, Inc. (NASDAQ:TSLA) faces mounting challenges, including Trump’s tariffs affecting supply chains and weaker sales in China and Europe. Analysts warn that Musk’s political affiliations are eroding Tesla’s brand reputation, further exacerbating the company’s struggles in its second-largest market and beyond.
Overall, TSLA ranks 1st on our list of top stocks to buy from Ark Invest’s portfolio. While we acknowledge the potential for TSLA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.