Tesla stock is sliding, but Cathie Wood just bet $14 million that everyone else is wrong

The move raises a familiar question for everyday investors: Is this a buying opportunity or a risky bet on a volatile stock?

A vote of confidence or a high-risk play?

Ark Invest added Tesla shares to three of its flagship ETFs: the ARK Innovation ETF (BATS:ARKK), ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) and ARK Space & Defense Innovation ETF (BATS:ARKX).

In total, the funds purchased more than 39,000 shares, with the bulk going into ARKK, Wood's largest and most closely watched fund.

The timing is notable. Tesla shares recently fell, closing down more than 2% in a single session, and the stock has faced ongoing volatility tied to production concerns, pricing pressure and broader market uncertainty.

Still, Wood has a long track record of buying Tesla during downturns. Most notably, she grabbed nearly 690,000 shares (2) across two exchange-traded funds, worth about $141 million, when the electric-car maker stock tanked 25% in January 2024.

Tesla remains a core holding across Ark's funds, and she has repeatedly argued the company's long-term potential, particularly in artificial intelligence and autonomous driving, outweighs near-term swings.

What's driving the bullish case

Some Wall Street analysts remain optimistic, as well.

Morgan Stanley recently projected Tesla could deliver around 1.6 million vehicles this year (3), pointing to growth drivers like its robotaxi ambitions and continued development of its Full Self-Driving (FSD) technology.

There's also rising interest in Tesla's energy business, particularly as data centers and AI infrastructure drive demand for power storage. In fact, Tesla deployed a record 46.7 gigawatt-hours of energy storage products (4) in 2025, which marked a 48% increase from the year prior.

Energy generation and storage revenues climbed 27% to $12.7 billion (5) in 2025. Solar installations and stationary batteries, such as the Megapack, drive almost a quarter of the company's gross profit. The Megapack alone, for example, contributed $1.1 billion of the storage side's $3.8 billion last year.

Meanwhile, energy storage projects (such as those used for data centers), are underway. In its 10-K filing (6) with the SEC, Tesla said it expects to recognize $4.96 billion this year in deferred revenue from those projects, which is more than double the amount recognized last year.

But that optimism comes with caveats. Tesla has missed expectations in parts of its energy segment, and competition in the EV market continues to intensify, both in the U.S. and globally.

What investors should watch before following the trade

Wood's move may grab headlines, but it doesn't mean Tesla is a safe bet.

In fact, Tesla's valuation metrics remain stretched compared to many traditional automakers, and its stock has historically been prone to sharp swings in both directions.