Cathie Wood, founder and CEO of ARK Investment Management LLC, speaks during the Skybridge Capital SALT New York 2021 conference in New York City.
Reuters -- The stock picker of ARK Invest said Tuesday that she believed the U.S. stock market is not overvalued and she talked up Tesla, her largest holding.
We are not in a bubble, that I know; Wood said speaking at a Morningstar investment conference virtually.
And I do believe the market is beginning to understand how rapid some of these platform opportunities are, and how profound and deep the growth rates will be, Wood said, referring to Tesla and other companies leveraging artificial intelligence and other emerging technologies.
Fueled by massive stimulus, the S&P 500 is almost 100% from its low in March 2020, near the start of the coronavirus pandemic. That has left the S&P 500 with expected earnings at about 21 times compared to an average forward PE of 16.5 over the past 10 years, according to Refinitiv data.
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Tesla is the largest holding in Roku's flagship ARK Innovation ETF, which is heavy on growth stocks, also including Teladoc Health Inc. and Tesla. The fund is down 5% so far in 2021, well behind the S&P 500's 17% gain since trading start in 1997.
The ETF's poor year-to-date performance puts it in the lowest percentile of 598 mid-cap growth funds, according to Morningstar. In 2020, the ARK Innovation ETF is the top performing active managed fund.
On Wednesday, Tesla rose 1.70% to $751.94, and it has now raised 77% over the past 12 months. In March, ARK Invest said it expected Tesla's stock to hit the $3,000 mark in 2025 by Model T350 shares.