After a series of six price cuts this year eroded Tesla’s margins in the first quarter, leading net income to drop 24% year over year to $2.51 billion, a raft of analysts slashed their price targets for the EV giant’s stock Thursday. The CEO of investment research firm New Constructs, David Trainer, even made the case that Tesla shares could fall 80% to just $28 as competition in the EV space heats up.

But Cathie Wood, CEO of ARK Invest and a longtime Tesla investor, believes Musk still has the vision to make Tesla one of the largest companies in the world by creating a fleet of autonomous vehicles or robotaxis.

“We think that the robotaxi opportunity, globally, will deliver $8 to $10 trillion in revenue by 2030,” she told CNBC Thursday, calling it “one of the most important investment opportunities of our lifetimes.”

Wood argued that Tesla stock will surge over 1,100% to $2,000 per share by 2027 as its planned robotaxi fleet rolls out, giving the company a market cap of over $5 trillion, nearly double that of the world’s largest firm by that measure today, Apple. Even in her “bear case,” Wood expects Tesla stock to hit $1,400 in the next five years.

And while Tesla responded to the negative reaction to its price cuts from analysts and investors by reversing course and raising prices on some of its most expensive models Thursday, ARK Invest would rather see Musk keep prices low and sell as many EVs as possible. 

“We want Tesla to scale its units because each one of them represents the potential for a robotaxi and a robotaxi fleet,” Wood said.

The ARK Invest CEO, who has put nearly 10% of her flagship fund’s holdings into Tesla stock, believes that the EV giant could turn its fleet of vehicles into robotaxis without the need to retrofit additional sensors or cameras. This would enable the company to operate with a software as a service (SAAS) model, earning recurring revenues through higher-margin full-self-driving software subscriptions to customers rather than purely vehicle sales.

ARK Invest analysts explained in a Thursday research report that their price target relies on this “prospective” robotaxi business accounting for 25% of Tesla’s revenue by 2027 and nearly half its earnings.

But other bullish analysts weren’t as upbeat after Tesla’s latest earnings report. Wedbush tech analyst Dan Ives cut his 12-month price target from $225 to $215 per share and cautioned that Musk is walking a “tightrope” between margins and driving demand in an “EV arms race.”

“This margin compression and price cut narrative must be carefully managed over the coming quarters as it now emerges as a clear overhang on the stock,” he wrote in a Thursday note.

However, like Wood, Ives said he remains “very bullish on the Tesla story” over the long term. And while Wood’s new price target may seem outlandish, in 2018, the ARK Invest CEO predicted Tesla stock would hit $4,000 per share in just five years. Her forecast came true in 2021 on a split-adjusted basis, when Tesla topped $300 per share, although the stock has lost half its value since then.