The ARK Innovation ETF (NYSEArca: ARKK) continues minting new, impressive chapters to what’s rapidly becoming a stellar legacy. Electric vehicle giant Tesla (NASDAQ: TSLA) is playing a vital role ARKK’s success and it appears more upside is one the way for Elon Musk’s company.
Just days ahead of a stock split designed in part to make the $2,000-plus stock more accessible to a broader swath of investors, at least one analyst is boosting his Tesla price target.
“Tesla stock could hit $3,500 a share? That’s the new bull-case scenario that Wedbush analyst Dan Ives published on Sunday,” reports Al Root for Barron’s. “That isn’t his official price target—that’s $1,900 a share. In fact, he still rates share the equivalent of Hold. Instead of changing his base price target, Ives raised his view on how good things could get.”
Driving ARKK Higher
ARKK, now the largest equity-based actively managed ETF, is known for having one of the largest weights to Tesla among all ETFs, but there’s more to the story.
“Companies within ARKK include those that rely on or benefit from the development of new products or services, technological improvements and advancements in scientific research relating to the areas of DNA technologies (‘’Genomic Revolution’), industrial innovation in energy, automation, and manufacturing (‘Industrial Innovation’), the increased use of shared technology, infrastructure and services (‘’Next Generation Internet’), and technologies that make financial services more efficient (‘Fintech Innovation’),” according to ARK Invest.
Of course, Tesla is meaningful to ARKK outcomes, making the car maker’s growing footprint in China all the more compelling.
“China is the world’s largest market for new cars as well as the largest market for electric vehicles. Better-than-expected demand in the country is a big positive for Tesla stock as well as other EV makers. But that isn’t all that is required for Tesla to hit $3,500,” according to Barron’s.
Currently, electric vehicles represent a small percentage of new automobiles sold around the world and cars on the road, but that percentage is expected to increase in a big way over the next several years, but massive growth is coming for the industry. Increasing battery life and power is essential to converting more drivers to electric vehicles.
“The million-mile battery has been talked about for months. If achieved, Tesla batteries would outlast Tesla car bodies and be used on multiple generations of vehicles. What’s more, it could allow Tesla to become a battery supplier to other EV makers and drive down the cost of batteries for its Tesla-branded vehicles,” reports Barron’s.
For more on disruptive technologies, visit our Disruptive Technology Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.