Tesla Bull Cathie Wood Sees Big Trouble Ahead for GM and Ford

(Barron's) - Market-darling money manager Cathie Wood, head of Ark Investments and an inveterate bull on Tesla  (TSLA) - Get Tesla Inc Report, offers a dire forecast for fellow automakers General Motors  (GM) - Get General Motors Company (GM) Report and Ford  (F) - Get Ford Motor Company Report.

“It’s going to be awfully difficult for those companies to manage during the next five to 10 years,” Wood she told Barron’s.

“And we would bet that they will not be alive in their current state. They may be in combination with someone else, or they may go bankrupt.”

Other investors apparently disagree. GM stock has gained 11% in the past month, and Ford has surged 27% amid optimism about their ability to compete with Tesla. That company’s shares soared 29% in the past month.

GM recently traded at $64.74, up 0.2%; Ford at $20.06, up 0.5%; and Tesla at $1,114.50, up 2%.

As for Tesla, if it’s “the first to be successful in autonomous [vehicles] in the U.S., we’re beginning to believe that not only will Tesla take that biggest share of the electric vehicle market, we believe that it could take 20% to 25% share of the total auto market in five years,” Wood said.

She predicts the stock will hit $3,000 in 2025.

Turning back to GM, Morningstar analyst David Whiston is a bull. He puts fair value for the stock at $68.

“General Motors vehicles are of the best quality and design in decades,” he wrote last month. “A competitive lineup in all segments, combined with a much smaller cost base, says to us that GM is starting to realize the scale to match its size.”

NOV 18, 2021

Dan is a freelance writer whose work has appeared in The Wall Street Journal, Barron's, Institutional Investor, The Washington Post and other publications.


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