Cathie Wood dumps Tesla, loads up on more Archer Aviation
Wood has been unloading her favorite stock due to an opportunity she sees in an emerging sector.
Cathie Wood really believes in a robotaxi future and she is investing heavily in the nascent technology, even at the expense of one of her favorite companies.
This week, Wood's Ark Invest continued its strategy of trimming holdings in Tesla (TSLA) - Get Free Report, and investing that cash in Archer Aviation (ACHR) - Get Free Report.
DON'T MISS: Cathie Wood trims Ark's largest holding by $18 million
On Tuesday ARK shed $2.15 million worth of Tesla shares, or 8,972 shares, through its ARK Innovation ETF (ARKK) - Get Free Report while purchasing $4.1 million shares of Archer.
The firm loaded up on more Archer on Wednesday, snapping up another 2.7 million shares, valued at about $16 million based on the stock's closing price of $5.94 per share.
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“We think that the robotaxi opportunity globally will deliver $8 to $10 trillion in revenue by 2030 and is one of the most important investment opportunities of our lifetimes,” Wood told CNBC in an April 20 interview. “One of the reasons for that is it is going to save lives. Autonomous driving is going to take away the human error, we believe.”
According to a report from Allied Market Research, as noted by Flying, the electric aircraft industry is expected to reach $23.5 billion by 2031, with a compound annual growth rate of 10.9 percent from 2022 to 2031.
This growth is expected due to a number of factors, including greater demand for short-range routes, advances in batteries and electric propulsion systems, environmental concerns and attempts to drive down the operational cost of aviation.
But there are headwinds the industry has to face, including making the large, heavy batteries required for power, which need to be recharged frequently. Limited infrastructure supporting electric-powered aircraft also limits the market’s growth, the report noted.
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