Tesla (NASDAQ: TSLA) and Kodiak AI (NASDAQ: KDK) are on the cutting edge of autonomous driving, but they have something else in common this week. They were the only two stocks that Cathie Wood’s Ark Invest bought across all of its exchange-traded funds (ETFs) on Monday.
Wood is a fan of futuristic trends, especially those that are rising in real time. As the co-founder, CEO, and primary stock picker at Ark Invest, she watches over an empire of aggressive growth funds.
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Ark Invest owns more than $900 million in Tesla stock, its largest holding, representing 9% of its total assets. Kodiak AI is a much smaller holding. However, the two stocks peaked in December. They are also both trading roughly 30% below their all-time highs set just four months ago. Let’s take a closer look at the two portfolio purchases that Wood made to kick off the trading week.
Tesla probably doesn’t need much of an introduction, even if it didn’t sell the most electric cars worldwide last year. China’s BYD — which probably could use an introduction to most stateside investors — took the crown in 2025. However, based on initial deliveries through the first three months of this year, Tesla is back in pole position.
The business has stalled lately. Tesla’s revenue declined 3% last year, its first top-line dip in the last 20 years. Last year’s regression followed a flat 2024. The end of the $7,500 tax credit for most domestic electric vehicle purchases in September of last year will hurt, but the pain was already there for several quarters before that spigot got turned off.
Last week, Tesla ended production of the Model S and Model X. They were a small part of the sales mix, but it’s odd that the two high-end lines, where the tax credit wasn’t a consideration for most purchases, got nixed. The Cybertruck also isn’t selling briskly, but Tesla’s not throwing in the towel on that one just yet.
Tesla stock is holding up surprisingly well, given where it is after four years of sharply decelerating revenue. Tesla is trading at a rich multiple relative to the market and its automaker peers. The thing to remember here — and possibly why Wood is adding to her already-largest position at Ark — is that betting against Tesla has burned investors before.
The company may seem to be in a funk right now, but the stock chart tells a different story. The shares may have fallen by nearly a third since peaking in December, but they are beating the market with a 43% return over the past year and an 85% jump over the past three years.
If you’re bracing for another year of declining sales, given the recent sluggishness and the discontinuation of its two luxury models, rub your eyes and look ahead. Analysts see revenue rising 9% this year, accelerating to a 17% increase in 2027. Earnings growth should be even stronger.
That rosy near-term outlook may not seem real. Didn’t Tesla just stun the market with a sharp sequential drop in deliveries in the first quarter of this year? Didn’t it produce a lot more cars than it handed over to drivers in the first quarter, suggesting markdowns to clear out excess inventory?
There is more optionality to the Tesla story than it seems if you’re locked in on the rearview mirror. As bad as 2025 may have been, energy generation and storage revenue rose by 25%. Its services revenue is also clocking in with double-digit growth. The Cybercab is now entering production. The Optimus autonomous humanoid robots are coming. Even within the remaining Model Y and Model 3 lines, are you seeing how the oft-lampooned full self-driving (FSD) platform keeps getting better with every over-the-air update?
Wood apparently sees the opportunity in the recent pullback. She’s backing up the truck. She’s probably backing up the Cybertruck.
Tesla isn’t just the largest holding across the Ark Invest universe of ETFs. With its $1.3 trillion market cap, there are only eight other stocks with loftier price tags. Kodiak AI is at the other end of the spectrum. With a market cap of $1.3 billion, it’s one of the smaller companies that Ark Invest owns.
The business itself is even smaller, for now. Kodiak uses AI tools that allow owners of commercial trucks to participate in its platform, where their vehicles haul stuff around on their own. The fleet is tiny right now. There were just 10 commercial vehicles in its fleet near the end of last year, but it has logged more than 3 million miles of AI-assisted self-driving ahead of launching its Kodiak Driver virtual product, which enables fully driverless operations.
There will be big winners and losers among self-driving-car stocks. Kodiak AI is one of the riskiest publicly traded players. Wood is patient, and this remains a small bet in her much larger collection of growth stocks.
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Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.
Cathie Wood Goes Bargain Hunting: 2 Stocks She Just Bought was originally published by The Motley Fool