Cathie Wood Dumps Tesla Shares Amid Stock Volatility Concerns

Cathie Wood reduces Tesla stake amid mixed investor sentiment, while analysts remain optimistic on AI-driven growth.

  • Cathie Wood sold about 7,500 shares of Tesla (TSLA) worth $3.3 million, shifting funds toward smaller growth stocks.
  • Investor Michael Burry described Tesla as “ridiculously overvalued” in a recent post.
  • Tesla stock has risen 12.7% year-to-date but faced volatility due to diverse project focuses and CEO Elon Musk’s other interests.
  • Wedbush analyst Dan Ives remains optimistic about Tesla, emphasizing its future in AI and autonomous technology with a $600 price target.

Tesla (TSLA) shares gained over 4% this week, yet Cathie Wood of Ark Invest reduced her stake, selling approximately 7,500 shares valued at $3.3 million on December 4. Wood reallocated funds from Tesla into smaller and mid-cap growth stocks, marking a continued shift from large-cap tech investments.

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The Ark sale follows critical views from investor Michael Burry, who called Tesla “ridiculously overvalued” in a recent Substack post. Burry noted that the company’s market capitalization has been inflated for an extended period. Concerns from investors also surround Elon Musk‘s broad focus, including ambitious plans like a flying car and ventures outside of Tesla, such as XAI and political activities. This has contributed to an uneven 2025 stock performance.

Year-to-date, Tesla stock is up 12.7% but has gone through multiple ups and downs, leading some investors to avoid the swings. Despite these challenges, some analysts hold a positive outlook. Wedbush analyst Dan Ives highlighted Tesla‘s AI advancements as a crucial part of its future during a recent event. Ives described the approval of Elon Musk’s compensation plan as a “bright green light” for the company’s AI and autonomous technology initiatives, maintaining an Outperform rating and a $600 price target on the stock.

For additional context, Tesla faces scrutiny over its project breadth and leadership focus, factors influencing its market behavior and investor sentiment this year.

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