Tesla ( TSLA ) bull Cathie Wood is sticking with the electric vehicle maker after a rough February.
The Ark Investment founder says there is a lot of "pent-up demand" for Tesla vehicles. The big valuation unlock, in her view, is Tesla releasing robotaxis across the country.
"So I now think they're going to start seeding every state [with robotaxis] and their Full Self-Driving. According to our calculations, their robotaxi will be safer in the fourth quarter than human drivers are," Wood told me at the Bitcoin Investor Week conference (video above).
Wood has consistently said she sees Tesla's stock hitting $2,600 by 2029.
Tesla shares are down 27% year to date and are the worst-performing component of the "Magnificent Seven" stocks — which also include Apple ( AAPL ), Amazon ( AMZN ), Nvidia ( NVDA ), Google ( GOOG ), Microsoft ( MSFT ), and Meta ( META ).
The stock fell 28% in February alone versus a modest drop for the S&P 500 ( ^GSPC ).
The weakness in sentiment reflects more than just concern that Elon Musk's closeness with Trump is turning away buyers around the world.
Tesla sold 63,238 vehicles in China in January, according to data released this week by the China Passenger Car Association. The figure marked a 33% drop from December.
At the same time, Australia's Electric Vehicle Council reported that Tesla's overall sales fell 33% year over year in January.
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Tesla doesn't report monthly sales in China in line with rivals Nio ( NIO ), Li Auto ( LI ), and Xpeng ( XPEV ). But even if it did, they would likely be softer than what all three just reported for February.
In the US, prices on used Cybertrucks, Model 3s, Model Ss, Model Ys, and Model Xs continue to drop. Tesla is facing increased EV competition from General Motors ( GM ) and Ford ( F ), while some consumers are opting for hybrids.
In the past 90 days, the average price of a Tesla has declined 4.27%, according to data from CarGurus . The fastest price declines are in Cybertrucks, followed by the Model S.
Meanwhile, new tariffs from the Trump administration stand to raise costs for Tesla and other automakers.
The president has signed two executive orders imposing additional 25% tariffs on steel and aluminum, both key raw materials used by Tesla.
Trump's new trade war with China doesn't help either — a 2023 study by Nikkei found that 40% of the suppliers for materials used in Tesla's batteries are Chinese companies.
Tesla's fourth quarter left a lot to be desired as well.
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The company's earnings per share missed analyst estimates by a penny. Automotive sales fell 8% year over year alongside price cuts across the Tesla vehicle lineup.
"Although both technology and execution risk seem substantially less than was once feared, expansion into higher volume segments with lower price points seems fraught with greater risk relative to demand, execution, and competition. Meanwhile, valuation appears to be pricing in upside related to expansion into mass-market segments well beyond our volume forecasts for the Model 3," JPMorgan analyst Ryan Brinkman wrote in a client note.
Brinkman rates Tesla's stock at Underperform.
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi , Instagram , and LinkedIn