Cathie Wood's Ark Invest Has Built an $870 Million Tesla Position. Here's the Thesis Keeping Her In.

While I don't mimic her investments, I really appreciate Cathie Wood and her vision at Ark Investment Management. Wood doesn't seem to get caught up in momentum and macroeconomics, and instead takes a contrarian approach to the stock market, with a special emphasis on high-growth tech stocks, fintech, and disruptive technology that, on the surface, seem speculative.

Her portfolio of stocks, held in a family of exchange-traded funds under the Ark umbrella and managed by Wood, is often acquired at bargain-basement prices and has potential for multibagger gains. A great example is Tesla (NASDAQ: TSLA), which is down 20% so far this year, including a huge 18% drop following its second-quarter earnings call.

Cathie Wood, CEO of Ark Investment Management. Image source: Getty Images.

But while many investors scrambled for cover, Wood took advantage of Tesla's 52-week low to snatch up another $14.3 million in shares. Wood now has $870.6 million in Tesla stock in her company's combined exchange-traded funds.

Data source: Cathie's Ark.

Wood and her $2,600 price target for Tesla

Cathie Wood is one of the biggest bulls on Wall Street for Tesla. So big, in fact, that she has a 2029 price target of $2,600 per share for Tesla stock, representing potential upside of more than 700%.

While Tesla is famously working on the technology for Optimus robots -- Elon Musk's vision for humanoid, AI-powered robots that can both perform household chores and work in factories -- Wood is more enamored by Tesla's plans for robotaxis and full self-driving (FSD) technology. She has said she believes most of Tesla's upside lies in its autonomous vehicles, citing Musk's claim that Tesla robotaxis will scale faster than Waymo's and operate in as many as 50% of major U.S. cities by the end of the year.

Tesla vehicle deliveries were up in the second quarter, jumping 25% from a year ago to 480,126. Tesla is running early versions of its v15 autonomous driving software to train robotaxis,

Tesla customers can also use a supervised FSD version of the software. Tesla says that its vehicles have completed nearly 12 million miles using supervised FSD software, with v14 software rolling out to customers in the U.S. and South Korea this year. If Tesla is successful in rolling out its unsupervised FSD technology on a widespread basis, any Tesla on the road with an FSD subscription could be used as a robotaxi -- completely disrupting the rideshare industry.

Tesla has also begun production of its Cybercab, which it says will be "the workhorse of our robotaxi fleet." Tesla is currently approved for unsupervised rides in its robotaxis for Austin, Texas, as well as the Florida cities of Miami, Orlando, and Tampa.

Wood's price target for Tesla is aggressive -- but it also fits her contrarian picks and her history of leaning into disruptive technology. As Tesla struggles against the broader market this year, don't be surprised if Ark Invest picks up more shares.

Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.