Aniket PujariCathie Wood, CEO of ARK Invest, has consistently expressed extremely bullish price targets for Tesla (TSLA) stock, emphasizing its potential in electric vehicles (EVs), autonomous driving, and robotaxi services. In an interview last month, she reiterated her $2,600 price target, which is approximately 980% above Thursday’s closing price of $241. Wood has a history of making ambitious Tesla price predictions, some of which have faced skepticism; however, her optimism has generally aligned with the company’s meteoric rise. Her first purchases for ARK occurred in Q4 2016, when Tesla traded between $12.10 and $14.65 per share, split-adjusted. Getting in early on a > 20-fold investment in less than 10 years merits attention. However, her $2,600 per-share price leads to a valuation of around $8.4 trillion for the company, which exceeds the combined market capitalizations of Apple, Microsoft, and Nvidia . This is even more remarkable considering that collectively, those three companies are expected to generate over $300 billion in earnings in 2025 and more than $280 billion in free cash flow, and they have been experiencing significant growth. Tesla, meanwhile, is forecast to earn a respectable, but far smaller, $9 billion in profits and $4.5 billion in free cash flow. Still, sales trends and expectations have been declining more recently as the company contends with stretched consumers, fallout from Elon’s affiliation with the current administration, and, ironically, tariff issues. Even if Wood assigns a higher multiple to Tesla’s earnings than the market applies to other growth businesses, her forecasts appear ambitious. What are her assumptions? Wood’s rationale for the $2,600 base case target by 2029 focuses on Tesla’s transformation from an automaker to a technology and software company, similar to Apple, Microsoft, and Nvidia. In ARK’s “Big Ideas 2025,” they forecast 50 million robotaxis globally by 2030, with half of them expected to be Teslas. Depending on whose estimates are used, that could represent about 15% of the forecast EV fleet at that time, but ARK estimates that the robotaxis, due to higher utilization rates, might account for as much as 50% of miles driven at a far lower cost per mile than the current robotaxi/FSD (full self-driving) leader, Waymo. Their models suggest a low unit cost for the future robotaxi from Tesla and predict a cost per mile of around $ 0.25, which is one-eighth the cost per mile of a human ride-hail service from Uber. They believe the total addressable market could be $10 trillion and estimate that $34 trillion of enterprise value will be created across the industry within the next five years. I share their optimism that AI, robotics, self-driving cars, trucks, and drones will supercharge productivity and transform the world. Still, their $10 trillion forecast would therefore account for approximately 10% of global GDP projections in 2030. Wood’s/ARK’s projection for Tesla’s valuation suggests it would be 2.5% of global GDP , which, to be polite, is an optimistic estimate. The trade before earnings Tesla reports earnings on Tuesday after the close, and of the 21 analysts who have recently updated their estimates, 20 (over 95%) have lowered their targets. This increased pessimism is reflected in the stock price. Tesla has fallen approximately 50% since reaching its post-election highs, significantly underperforming the S & P 500 and the Nasdaq 100. The technicals remain weak at the moment. Nine of the top 10 best-performing technical indicators (using weekly data to reduce noise and identify longer-term trends) have maintained a bearish posture as of Thursday’s close. The earnings-related 1-day implied move for Tesla is approximately 8%. However, the move over the month following a quarterly earnings release is about 15%. One way to anticipate continued weakness after earnings is with a put calendar spread, such as the May 30th weekly and the August 15th regular expiration$ 200-strike put spread. This involves selling the nearer-dated May $200 puts to buy the longer-dated August $200 puts. As of Thursday’s closing price, this trade would cost approximately $9.40 per share, totaling $940, as each options contract represents 100 shares. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. 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