Tesla Shares Decline in Premarket Trading: Cathie Wood's Ark Invest Stays Confident with $14M Purchase Despite Increasing Bearish Sentiment
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 07 2026
0mins
Source: stocktwits
ARK Investment's Recent Purchases: ARK Investment purchased a total of 39,691 shares across three ETFs, including significant investments in Tesla, despite the company's recent stock decline and bearish market sentiment.
Tesla's Price Target and Market Outlook: ARK continues to project a $2,600 price target for Tesla by 2029, suggesting a potential market cap of $9.75 trillion, while JP Morgan has issued a bearish rating with a $145 price target, indicating a 60% downside.
Concerns Over Tesla's Performance: Tesla's shares have dropped significantly, with analysts warning of a potential 36% loss by June due to weak deliveries and missed expectations, marking the company's worst quarterly performance since 2022.
Investor Sentiment and Market Reactions: Retail sentiment towards Tesla has turned extremely bearish, with concerns about overvaluation and a lack of clarity regarding the company's future prospects, leading to increased caution among investors.
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Analyst Views on TSLA
Wall Street analysts forecast TSLA stock price to fall
30 Analyst Rating
12 Buy
11 Hold
7 Sell
Hold
Current: 425.300
Low
25.28
Averages
401.93
High
600.00
Current: 425.300
Low
25.28
Averages
401.93
High
600.00
About TSLA
Tesla, Inc. designs, develops, manufactures, sells and leases high-performance fully electric vehicles and energy generation and storage systems, and offers services related to its products. Its segments include automotive, and energy generation and storage. The automotive segment includes the design, development, manufacturing, sales and leasing of high-performance fully electric vehicles, and sales of automotive regulatory credits. It also includes sales of used vehicles, non-warranty maintenance services and collisions, part sales, paid supercharging, insurance services revenue and retail merchandise sales. The energy generation and storage segment include the design, manufacture, installation, sales and leasing of solar energy generation and energy storage products and related services and sales of solar energy systems incentives. Its consumer vehicles include the Model 3, Y, S, X and Cybertruck. Its lithium-ion battery energy storage products include Powerwall and Megapack.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Stock Price Reaction: Despite the record deliveries, Tesla's stock fell approximately 7.5% following the report, its worst performance in nearly a year, reflecting market concerns about future profitability.
- Production vs. Deliveries: Tesla produced 451,758 vehicles in Q2, falling short of deliveries, suggesting the company may have drawn down inventory to meet delivery targets, raising questions about the sustainability of sales.
- Margin Pressure: With Tesla introducing more competitively priced models, the automotive gross margin was 19% in Q1, and there are concerns that the high delivery volume in Q2 could further compress margins, impacting the company's long-term profitability.
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- ARK Innovation ETF Performance: In 2025, the ARK Innovation ETF achieved a 35.49% return, significantly outperforming the S&P 500's 17.88%, yet as of July 2, 2023, it has a five-year annualized return of -8.56%, highlighting the impact of market fluctuations on long-term performance.
- Impact of Technological Innovation: Wood emphasizes that the deflationary effects of technological innovation, particularly in AI, will enhance economic productivity, although her funds faced challenges in Q1 2026, she remains optimistic about future growth potential.
- Investor Confidence Erosion: Despite Wood's bullish outlook on Tesla and tech stocks, the ARK Innovation ETF experienced approximately $1.3 billion in net outflows over the past 12 months, reflecting market skepticism regarding her investment strategy and the associated uncertainties.
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- Micron Technology Risks: Burry highlighted that Micron's stock trades significantly above its 200-day moving average, with its fiscal Q3 revenue soaring over 400% year-over-year to $41.5 billion; however, he believes such high earnings levels are unsustainable and may face downside risks.
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See More
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See More
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- Record Deliveries: Tesla delivered 480,126 vehicles in Q2, marking a 25% year-over-year increase and surpassing analyst expectations of 406,000, indicating strong demand and growth potential in the electric vehicle market.
- Stock Price Reaction: Despite the record deliveries, Tesla's stock fell approximately 7.5% following the report, its worst performance in nearly a year, reflecting market concerns about future profitability.
- Production vs. Deliveries: Tesla produced 451,758 vehicles in Q2, falling short of deliveries, suggesting the company may have drawn down inventory to meet delivery targets, raising questions about the sustainability of sales.
- Margin Pressure: With Tesla introducing more competitively priced models, the automotive gross margin was 19% in Q1, and there are concerns that the high delivery volume in Q2 could further compress margins, impacting the company's long-term profitability.
See More
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- Tesla Stock Purchase: Cathie Wood's Ark funds purchased 96,935 shares of Tesla at a 7.49% drop, amounting to approximately $38.1 million, indicating her strong conviction in Tesla's future growth despite recent volatility.
- ARK Innovation ETF Performance: In 2025, the ARK Innovation ETF achieved a 35.49% return, significantly outperforming the S&P 500's 17.88%, yet as of July 2, 2023, it has a five-year annualized return of -8.56%, highlighting the impact of market fluctuations on long-term performance.
- Impact of Technological Innovation: Wood emphasizes that the deflationary effects of technological innovation, particularly in AI, will enhance economic productivity, although her funds faced challenges in Q1 2026, she remains optimistic about future growth potential.
- Investor Confidence Erosion: Despite Wood's bullish outlook on Tesla and tech stocks, the ARK Innovation ETF experienced approximately $1.3 billion in net outflows over the past 12 months, reflecting market skepticism regarding her investment strategy and the associated uncertainties.
See More
Michael Burry Bets Against AI Stocks Amid Valuation Concerns
- Short Position Disclosure: Renowned hedge fund manager Michael Burry revealed his short positions against Nvidia, Tesla, and Applied Materials this week, indicating strong skepticism towards AI-related stocks, particularly as their valuations reach historical highs.
- Micron Technology Risks: Burry highlighted that Micron's stock trades significantly above its 200-day moving average, with its fiscal Q3 revenue soaring over 400% year-over-year to $41.5 billion; however, he believes such high earnings levels are unsustainable and may face downside risks.
- Nvidia Valuation Defense: Despite Nvidia's fiscal Q1 revenue rising 85% year-over-year to $81.6 billion, with data center revenue climbing 92%, its stock trades at about 30 times earnings, leading Burry to question whether this high valuation can be maintained amid potential AI bubble concerns.
- Tesla Profitability Challenges: Tesla delivered 480,126 vehicles in Q2, up 25% year-over-year, yet its stock fell 7.5%, with Burry arguing that its high price-to-earnings ratio exceeding 350 times raises significant risks, especially if future profitability from robotaxi and software services is delayed.
See More
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- Short Position Disclosure: Renowned investor Michael Burry revealed his short positions against Nvidia, Tesla, Applied Materials, Caterpillar, and the iShares Semiconductor ETF on his Substack, indicating a strong skepticism towards AI-related stocks that may prompt a market reassessment of these equities.
- Micron Technology Risks: Burry highlighted that Micron's stock trades significantly above its 200-day moving average, with revenue in fiscal Q3 2026 soaring over 400% year-over-year to $41.5 billion; however, he argues that such high earnings levels are unlikely to be sustainable, posing downside risks.
- Nvidia Valuation Controversy: Despite Nvidia's fiscal Q1 2026 revenue surging 85% year-over-year to $81.6 billion, with data center revenue climbing 92%, the stock trades at about 30 times earnings, leading Burry to question whether this high valuation can endure, especially amid concerns of an AI bubble.
- Tesla Profitability Pressure: Tesla delivered 480,126 vehicles in Q2, up 25% year-over-year, yet its stock fell 7.5% on the report day; Burry believes its 350 times earnings valuation is excessive, and future profit growth expectations may be overly optimistic, warranting caution from investors.
See More
Rivian Exceeds Q2 Delivery Expectations
- Delivery Exceeds Expectations: Rivian delivered 12,194 vehicles in Q2, surpassing its guidance of 9,000 to 11,000, indicating strong market demand and improved production capabilities, which is likely to boost investor confidence.
- Full-Year Guidance Raised: The company raised its full-year delivery target from 62,000-67,000 to 65,000-70,000 vehicles, reflecting confidence in its ability to ramp up deliveries in the second half, although this requires nearly doubling the delivery pace.
- Mixed Financial Performance: Despite an 11% year-over-year revenue increase to $1.38 billion in Q1, the automotive segment reported a $62 million gross loss, highlighting profitability challenges during the expansion phase, necessitating close monitoring of the R2 model's profitability.
- Enhanced Capital Support: Rivian secured up to $4.5 billion in Department of Energy loans and increased its Georgia plant's annual capacity by 50% to 300,000 vehicles, strengthening its capital position during the rollout of new models and reducing associated risks.
See More
Rivian Exceeds Q2 Delivery Expectations, Raises Full-Year Target
- Record Deliveries: Rivian delivered 12,194 electric vehicles in Q2, surpassing its forecast of 9,000 to 11,000, indicating strong market demand and boosting investor confidence, leading to an over 8% stock price increase.
- Raised Full-Year Target: The company raised its full-year delivery target from 62,000-67,000 to 65,000-70,000 vehicles, reflecting optimism about the market acceptance of the new R2 model, with expectations of reaching 42,000 deliveries in the second half, nearly double the first half's pace.
- Profitability Challenges: Despite the increase in deliveries, Rivian's automotive segment reported a $62 million loss in Q1, primarily due to declining sales and lower production volumes, indicating that profitability still needs improvement.
- Enhanced Capital Support: Rivian secured up to $4.5 billion in Department of Energy loans and a $1 billion investment from Volkswagen Group, significantly bolstering its production capacity and reducing business risks as it aims to meet its delivery targets in the second half.
See More
