Why Cathie Wood Just Dumped Tesla for This Hot EV Stock
30/03/2022 12:39 MTFL
Famed investor Cathie Wood is a bull on electric vehicles (EVs), as the industry fits her policy of investing in disruption and innovation growth stories, including autonomous technology. In a recent interview with Barron's, Wood even predicted EV sales to grow from 4.8 million units in 2021 to 40 million units in 2026.
Wood owns several EV stocks, but the one that's stood out so far is industry leader
Tesla (
TSLA.O). Tesla is, in fact, Wood's largest holding -- the stock constituted 7.54% across all of Ark Invest's family of exchange-traded funds (ETFs) as of March 28.
Yet, that's after Wood sold nearly 146,000 shares in Tesla on March 25. The last time Wood sold Tesla shares was in January.
What's even more surprising, though, is the EV stock Wood bought same day:
Nio (
NIO.N). The
Ark Autonomous Technology & Robotics ETF reported a purchase transaction of 420,057 shares of Nio on March 25.
To be sure, trimming her Tesla position doesn't necessarily mean Wood's conviction on the stock has lessened. Yet the fact that she bought Nio stock for the first time ever deserves a lot more attention from investors as it confirms Wood's conviction in the Chinese EV stock.
Why Nio caught Cathie Wood's attention
Wood's interest in Tesla shouldn't come as a surprise. The company's foothold in the EV industry is hard to match and even catch up with, as Tesla already has nearly a million cars out on the roads and its sales have grown exponentially in recent years.
Image source: Statista.
Yet competition is heating up, and Wood seemingly doesn't want miss any opportunity EV companies other than Tesla can bring to the table. Nio is, in fact, often called the "Tesla of China" and has even said it aims to sell better products than Tesla but at lower costs.
The fact that Wood bought Nio stock just one day after the company's fourth-quarter and full-year 2021 earnings release suggests something in the report caught Wood's attention. I believe it's the EV maker's growth plans.