For ETFs in 2020, it pays to have ample exposure to Tesla stock. The ARK Autonomous Technology & Robotics ETF (CBOE: ARKQ) proves as much.
ARKQ, a rising darling among equity-based actively managed ETFs, is higher by almost 58% year-to-date owing in large part to a 10% weight to Tesla. Broadly speaking, analysts are fawning for Tesla with one touting the electric vehicle maker’s battery ambitions as a compelling long-term catalyst for the stock.
A bullish analyst increased his price target for Tesla stock by more than 100%, to $2,500, just 69 days after raising his target price to $1,200,” reports Al Root for Barron’s. “Jefferies analyst Philippe Jean Houchois is the bull. He already rates Tesla stock a Buy and has been bullish for a while. Houchois has recommended Tesla stock since, essentially, late 2018.”
ARKQ captures the converging industrial and technology sectors, capitalizing from autonomous vehicles, robotics, 3D printing, and energy storage technologies. That wide mandate helps lever the ARK fund too much more than just self-driving cars, an important trait at a time of rapid robotics advancement.
Interesting Tesla Takes
ARKQ seeks long-term growth of capital. The fund is an actively-managed fund that will invest under normal circumstances primarily in domestic and foreign equity securities of autonomous technology and robotics companies that are relevant to the fund’s investment theme of disruptive innovation. Most of the fund’s assets will be invested in equity securities, including common stocks, partnership interests, business trust shares, and other equity investments or ownership interests in business enterprises.
“Wall Street is having a hard time keeping up with Tesla shares. The stock has gained about 375% year to date and 41% so far in August. It took about 71 calendar days for the stock to go from $1,000 to $2,000. It cracked $2,000 a share on Aug. 20,” according to Barron’s.
Adding to the Tesla case, the company said earlier this week the battery range on the popular Model 3 S is now 402 miles. Increased range is crucial in driving higher adoption of electric vehicles because simply put, fears of running out of charge have kept some buyers out of the market. As for near-term catalysts for Tesla stock, there are those, too.
“Nothing matters more on Battery Day than understanding how the million-mile batteries could profoundly change the auto business model,” wrote Houchois.
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.