Cathie Wood's Ark Invest says Tesla stock will more than quadruple in price by 2026 if it can deliver a network of self-driving taxis

• ARK Invest reiterated its bullish view on Tesla on Monday with a $4,600 price target by 2026.
• The innovation investor said Tesla could more than quadruple from current prices if it succeeds in rolling out a robo-taxi network of self-driving cars.
• "We now expect more demand for autonomous ride-hail at higher price points than we had modeled originally," Ark said.

Tesla stock still has plenty of upside, Cathie Wood's Ark Invest said in a blog post last week.

The innovation investor said it expects Tesla shares to more than quadruple to $4,600 per share by 2026, representing potential upside of 356% from current levels. Ark had previously estimated Tesla stock would surpass $3,000 by 2025.

Ark's bullish thesis on Tesla hinges on the company's ability to successfully develop and roll out a network of self-driving robo taxis. That network of taxis would operate an Uber-like service of shuttling people to and from different destinations, according to the research published by Ark.

That network could generate $486 billion in annual revenue for Tesla in 2026, according to Ark's bull case scenario. In its bear case scenario, ARK see's Tesla's robo-taxi network generating $51 billion in annual revenue. Tesla generated revenue of nearly $54 billion in 2021, primarily driven by its sale of electric vehicles.

"We now expect more demand for autonomous ride-hail at higher price points than we had modeled originally," Ark Invest explained.

The big question is when Tesla can realistically launch fully autonomous driving vehicles, let alone a network of self-driving taxis that would navigate different towns, cities, and countries. In Ark's downside scenario, it expects a autonomous ride-hailing taxi network launch in 2026.

"Bolstering our current view are not only the commercial launches of Waymo and Cruise but also fundamental advances in AI...The midpoint of our assumptions suggests that Tesla will commercialize autonomous ride-hail in 2024," Ark explained.

Given Ark's bullish expected upside in Tesla stock, it's no surprise the investment manager's top position across all of its ETFs is the electric vehicle company. Ark owns a combined $1.43 billion in Tesla stock, and it's the only stock in Ark's flagship ETF that has generated a positive return over the past year, according to data from Koyfin.

Even in its bear case scenario, Ark expects Tesla to nearly triple to $2,900 by 2026. "Although tuned to our expectations for 2026, we believe our Tesla model is methodologically conservative: we assume that Tesla's stock will trade like a mature company rather than a high-growth one in 2026," Ark said.