Cathie Wood Presents Trillion-Dollar Insights on Tesla and Apple's Missed Opportunities
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First, Let's Understand the Backdrop
Musk announced on July 6 that he would form a new political party. The news sent TSLA stock spiraling downward on Monday, leading to a $68 billion loss in market cap for the company and wiping out a staggering $15 billion from Musk's net worth.
On the other hand, rival Meta Platforms (META) has poached Apple's top artificial intelligence (AI) executive, Ruoming Pang. The news is a setback for Apple, which is already struggling with its AI ambitions and has delayed its Siri updates multiple times. Adding to Apple's woes, long-time COO Jeff Williams announced his retirement yesterday and is set to leave the company at the end of this year.
Wood Says Musk Is 'Much Less Distracted Now'
Commenting on Musk's America Party, Wood said that she has been dealing with one other controversy or another surrounding Musk since the time her ARK Invest first bought TSLA stock. Nonetheless, she said, 'We do trust the board and the board's instincts here and we stay out of politics.'
The long-time Tesla bull instead focused on Musk's announcement that he will oversee sales in the U.S. and Europe. She expressed confidence in Musk's abilities, saying, 'When he puts his mind on something, he usually gets the job done. So, I think he's much less distracted now than he was, let's say, in the White House 24/7.'
Notably, Tesla remains one of the largest positions in several ARK Invest ETFs (exchange-traded funds). Wood has also invested in Musk's private startups, including SpaceX, Neuralink, and xAI. Wood predicts that TSLA's stock price could reach $2,600 in the next five years if the robotaxi business takes off successfully.
Wood Says, 'Burden of Proof' Lies on Apple
Commenting on Apple's loss of AI head Pang, Wood noted that his exit puts the company in a precarious position. She believes that the ultimate mobile device is a self-driving car, and Apple should have ideally been a leader in this area. Autonomous vehicles (AVs) are one of the 'biggest AI projects in the world.'
After canceling its AV project, Project Titan, last year, Apple said that it would shift focus to developing autonomous driving software and EV technology for potential future collaborations or products. However, Apple is far from making progress on these initiatives as the company has not announced any new products yet. Despite these headwinds, Wood said Apple has to prove it can still succeed.
AAPL or TSLA: Which Is the Better Buy?
We used TipRanks' Stock Comparison Tool to determine which stock is currently favored by analysts. Due to the ongoing challenges, analysts remain divided on AAPL's outlook, while most prefer to stay on the sidelines regarding TSLA. However, AAPL does earn a Smart Score of eight, implying the stock is highly likely to outperform market expectations. Investors should conduct thorough research before choosing to invest in either stock.
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